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. 2021 Nov 21;119:106043. doi: 10.1016/j.jeconbus.2021.106043

Table 3.

Daily Stock Market Performance Pre- and Post- Policy Responses.

Lockdown/Stay-at-home
Interest Rate Cut
Average Daily Stock Index Return
Average Daily Stock Index Return
Before After Before After
Control Group −0.685 −0.690 −1.314 −3.200
(without policy event) (obs: 208) (obs: 665) (obs: 52) (obs: 428)
Treated Group −1.643 −0.524 −2.594 −3.069
(with policy event) (obs: 138) (obs: 440) (obs: 219) (obs: 752)
Differences −0.958*** 0.166 −1.280*** 0.132
(Treated - Control) (0.303) (0.187) (0.417) (0.174)
Difference in Differences Test (After) - (Before) = 1.124*** (After) - (Before) = 1.412***
(0.340) (0.340)

Notes: This analysis compares the average daily stock index returns of the treated group vs. the control group before and after the treatment. The treated group includes the countries that have implemented a policy action (interest rate cut or lockdown/stay-at-home order) to combat the COVID-19 pandemic. The control group includes the countries that have no policy response during our sample period. The pre- (post-) period refers to the period that was before (after) the policy announcement date. We controlled for the following variables: daily case increase rate, the stock return of the prior day, countries’ daily stringency index, countries’ gdp per capita, and countries’ human development index. Standard errors in parentheses for differences. *, **, *** denote statistical significance at the 0.1, 0.05, and the 0.01 levels, respectively.