The impact of the COVID-19 pademic on financial markets in developing and developed countries

Abstract

The aim of this master thesis is to measure quantitatively and with the support of economic indicators the overall economic effects of Covid-19 Pandemic on developed and developing countries. This master thesis focuses on financial markets and uses the standard event study methodology. Eight sample countries are used for this purpose, four from developed countries and four from emerging economies. The results of the study show that the Covid 19 pandemic led to volatile stock markets and negatively affected stock market returns. Based on the results of the study, it could be said that there is a link between the World Health Organisation's announcement on 11 March 2020 and the decline in stock markets and stock market returns. This master's thesis also examines with the support of economic indicators the effect on reel economy. It provides figures showing that the aviation and automotive industries are the most affected, while in the services sector, international travel is the most affected by the Covid-19 pandemic. On the other hand, the study also provides evidence that sectors such as textiles and pharmaceuticals have flourished.