Title: Action and reaction: COVID-19 and the nosedive in East Mediterranean Region stock markets

Authors: Asima Saleem

Addresses: National University of Modern Languages, Islamabad, Pakistan

Abstract: East Mediterranean Region has witnessed a large number of re-emerging pandemic infectious outbreaks. EM Region has been a region of great focus due to emerging economic losses and threats to human life. The COVID-19 viral outbreak weakened the global economy. EM Region comprised of 21 member countries and Palestine territory and all the countries share cultural and historical commonalities. They study used FTSE Med Index, a stock market performance indicator for EM Region and examined the impact of COVID-19 viral outbreak on stock market performance of EM Region by using an event study methodology through implication of market model and extreme value theory. Cumulative abnormal return approach is used to estimate the decline in stock returns during the event window of 30 days pandemic viral outbreak. The results showed significant negative cumulative abnormal returns, indicating a statistically significant effect of COVID-19 outbreak on stock market performance of EM Region.

Keywords: COVID-19; East Mediterranean Region; cumulative abnormal returns; CARs; stock returns; event study methodology.

DOI: 10.1504/EMJM.2020.113099

EuroMed Journal of Management, 2020 Vol.3 No.3/4, pp.274 - 287

Received: 17 May 2020
Accepted: 16 Sep 2020
Published online: 18 Feb 2021 *

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