How public attention affects stock returns: based on the responses of Chinese listed tourism companies during COVID-19

ABSTRACT

The COVID-19 pandemic unexpectedly shocked the Chinese economy. Due to its contagiousness and health risks, the COVID-19 pandemic significantly affected the tourism industry when the government established controls such as lockdowns and restrictions on the movement of people. We built a balanced panel data of all listed Chinese A-share tourism companies from January 20, 2020, to April 26, 2020, and we used an POLS model for empirical regressions to explore the impact of public attention about COVID-19 information on tourism companies’ stock returns. The results show that public attention, reading, commenting, and retweeting of COVID-19 information tended to influence investors’ psychological expectations and sentiment, leading to negative investor evaluations of tourism companies’ stock prices, which may eventually make tourism companies’ stock returns undervalued in the short run.

KEYWORDS:

• Public attention
• investor sentiment
• stock returns
• tourism
• COVID-19

Disclosure statement

No potential conflict of interest was reported by the author(s).

Data availability statement

All data generated or analysed during this study are included in this published article.

Additional information

Funding

This study is supported by the National Social Science Fund Key Project of China (20AZD095).