The COVID-19 Pandemic, Government Response, and Serbian Stock Market: Evidence from ARDL Cointegration Model
The COVID-19 Pandemic, Government Response, and Serbian Stock Market: Evidence from ARDL Cointegration Model

Author(s): Bojan Đorđević, Sunčica Stanković
Subject(s): Social Sciences, Economy
Published by: Udruženje ekonomista i menadžera Balkana
Keywords: COVID-19; BELEX15 stock index; Autoregressive Distributed Lag Cointegration Method; Error Correction Mode
Summary/Abstract: The existence of a real possibility that the current health crisis could lead to an economic crisis has prompted governments worldwide to make great efforts to sustain their markets. This paper explores the impact of COVID-19 and Serbian government anti-Covid activities on the domestic stock market using the Autoregressive Distributed Lag (ARDL) Cointegration model. In its research, the paper considers the impact of the number of newly infected and the number of deaths from coronavirus daily, as well as measures taken by governments to combat viruses on the representative Belgrade stock exchange index BELEX15. The results showed a significant long-term negative impact on the number of deaths per day and international travel control on the BELEX15 index. In terms of reducing the negative consequences of the crisis caused by the global pandemic, these results could be a good guideline for effective management of government measures.

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