Does a Government Response to COVID-19 Hurt the Stock Price of an Energy Enterprise?

ABSTRACT

This research examines the shock of a government response to COVID-19 on the stock prices of 30 international energy enterprises spanning from January 1, 2020 to December 31, 2020. Overall, the empirical results denote that a government response stringency index, containment and health index, and economic support index all have a statistically significant negative impact on their stock prices. The negative impact from the containment and health index is especially the greatest, implying that a government’s stringent responses have great negative effect on the stock prices of most energy enterprises.

KEYWORDS:

• COVID-19 pandemic
• government response stringency index
• containment and health index
• economic support index
• international energy enterprises
• stock price

JEL:

• G14
• C33
• I18
• Q40

Acknowledgments

We are grateful to Chun-Ping Chang for his guidance on an earlier version of this article. We are also grateful to the anonymous referees for helpful suggestions. Haiqing Hu is grateful to National Natural Science Foundation of China (72072144, 71672144, 71372173, 70972053), Research Fund for the National Soft Science Research Program (2014GXS4D153), the Doctoral Program of Higher Education (20126118110017), the Key Project of Shaanxi Soft Science Research Plan (2019KRZ007), Science and Technology Research and Development Program of Shaanxi Province (2021KRM183, 2017KRM059, 2017KRM057, 2014KRM28-2), Research Program Funded by Shaanxi Provincial Education Department (2015JZ021), Key Project of Shaanxi Provincial Development and Reform Commission (SJ-2019-000046-4), Key Projects of Social Science Planning of Xi’an (17J85), Shaanxi Technical Innovation Guidance Project (2017CG-016), General Projects of Social Science Foundation of Shaanxi Province (2019S016), and Doctoral Foundation of Xi’an University of Technology(105-451118012).

Supplemental data

Supplemental data for this article can be accessed on the publisher’s website.

Notes

1. Categorized by Macrotrends – The Premier Research Platform for Long Term Investors. https://www.macrotrends.net/.

2. The results of robustness tests are provided in Appendix Tables 4 and 5.