Dynamics and Co-movements Between the COVID-19 Outbreak and the Stock Market in Latin American Countries: An Evaluation Based on the Wavelet-Partial Wavelet Coherence Model


BİLGİLİ F., KOÇAK E., KUŞKAYA S.

Evaluation Review, 2022 (SSCI) identifier identifier identifier

  • Publication Type: Article / Article
  • Publication Date: 2022
  • Doi Number: 10.1177/0193841x221134847
  • Journal Name: Evaluation Review
  • Journal Indexes: Social Sciences Citation Index (SSCI), Scopus, Academic Search Premier, International Bibliography of Social Sciences, Periodicals Index Online, EBSCO Education Source, Education Abstracts, Educational research abstracts (ERA), EMBASE, MEDLINE, PAIS International, Psycinfo, Public Administration Abstracts, Public Affairs Index, Social services abstracts, Sociological abstracts
  • Keywords: new COVID-19 cases, stock market, new COVID-19 deaths, exchange rates, SP500, emerging Latin American countries, ENERGY-CONSUMPTION, TRANSFORM
  • Kayseri University Affiliated: No

Abstract

© The Author(s) 2022.The COVID-19 outbreak and the global uncertainty it causes produce an apparent panic in stock markets. Efforts to explain the economic spillover effects of COVID-19 can guide authorities to design a control policy against the financial impacts of pandemics. The paper examines the effects of the COVID-19 cases on the stock markets in the emerging Latin American countries of Argentina, Brazil, Chile, Colombia, Mexico, and Peru. The paper employs a continuous partial wavelet methodology to observe lead-lag relations between the daily variables of new COVID-19 cases and the stock market index for each Latin American country. Brazilian new COVID-19 cases led the Bovespa (BVSP) index to decline during the whole period, except February and June 2020, at one month-two month-frequency band. The wavelet and phase difference analyses indicate that, except for Brazil, COVID-19 cases did not affect the stock market indexes adversely during the whole sample period but did affect the stock exchange markets negatively during some sub-sample periods of the entire sample of each country. Dynamics of Latin American stock exchange markets in the short and long run can be explained by some other parameters of real and financial sectors and COVID-19 cases.