The impact of COVID-19 on stock markets: A systematic literature review
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Sami Emadeddin Alajlani 
, Malik Muhammad Sheheryar Khan , Lawal Yesufu , Yousuf Khan
This work is licensed under a Creative Commons Attribution 4.0 International License.
Abstract
This research investigates the disruptive impact of COVID-19 on the financial performance of stock markets in the United States of America (USA), Asia (China, Japan, South Korea, India), and the Middle East and North Africa (MENA) region context being the sample region. The research aim is to reveal the impact of COVID-19 on stock market returns in the sample regions. prior research suggests that 74 percent (Rakshit & Neog, 2022) of the global stock markets reported negative stock returns, increased volatility, and cumulative abnormal returns during the pandemic. The research considers an empirical approach that employs event studies, panel data regression models, and paired sample t-tests. In so doing this research considers the objective impact of the COVID-19 phenomenon. The results suggest that only 5 percent suggested stock returns indicated positive effects on stock market return and volatility, while 21 percent indicated mixed positive and negative impacts. The pandemic led to negative stock market returns in the sample region. The research reveals the negative impact was primarily due to government intervention in stock markets. The research adds support to current findings that encourage governments to swiftly adopt proactive measures to minimize the disruptive impact of stock markets.
Keywords: Stock Market, COVID-19, Pandemic, Literature Review
Authors’ individual contribution: Conceptualization — S.E.A. and L.Y.; Methodology — S.E.A., M.M.S.K., and Y.K.; Investigation — S.E.A., M.M.S.K., L.Y., and Y.K.; Resources — S.E.A., M.M.S.K., L.Y., and Y.K.; Writing — S.E.A., M.M.S.K., L.Y., and Y.K.; Supervision — M.M.S.K.; Funding Acquisition — S.E.A., M.M.S.K., L.Y., and Y.K.
Declaration of conflicting interests: The Authors declare that there is no conflict of interest.
JEL Classification: G10, G12, G15
Received: 03.05.2023
Accepted: 01.03.2024
Published online: 05.03.2024
How to cite this paper: Alajlani, S. E., Khan, M. M. S., Yesufu, L., & Khan, Y. (2024). The impact of COVID-19 on stock markets: A systematic literature review [Special issue]. Journal of Governance & Regulation, 13(1), 350–361. https://doi.org/10.22495/jgrv13i1siart9
