Impact of Covid-19 on Stock Market Capitalization: A Study on the Pakistan Stock Exchange
Keywords:
COVID-19, Pakistan Stock Market Capitalization, Regression Model, Data Normality Test, Data Stationery TestAbstract
The purpose of this research is to explore the COVID-19 effect on the Pakistan Stock Market Capitalization (PSMC) using data of daily prices of Pakistan Stock Exchange and daily numbers of COVID-19 new cases, death cases and recovery cases. The study uses combination of time series and event study method to analyze the daily changes to the size of market capitalization before, during and after COVID-19 from Jan/2020 to Dec/2021. We applied data normality and stationery test before applying Regression model. Regression models were applied for both periods i.e., 2020 and 2020-2021 and investigated the relationship among Daily CASES, DCASES, RECOVERY and Stock Market Capitalization. The study concludes that CASES and DCASES have no significant effect on the Pakistan Stock Market Capitalization; however, RECOVERY has significant and positive effect on the Pakistan Stock Market Capitalization.
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