ANALYZING THE IMPACT OF GOVERNMENT’S RESPONSES TO THE COVID-19 PANDEMIC ON THE VIETNAMESE STOCK MARKET’S PERFORMANCE: A SECTOR-INDEX APPROACH
Vol. 131 No. 5B (2022), Original Article
Vol. 131 No. 5B (2022)

ANALYZING THE IMPACT OF GOVERNMENT’S RESPONSES TO THE COVID-19 PANDEMIC ON THE VIETNAMESE STOCK MARKET’S PERFORMANCE: A SECTOR-INDEX APPROACH

Original Article
https://doi.org/10.26459/hueunijed.v131i5B.6523
Published 2022-05-16
Tran Thi Bich Ngoc
University of Economics, Hue University, 99 Ho Dac Di St., Hue, Vietnam
Pham Hoang Cam Huong
University of Economics, Hue University, 99 Ho Dac Di St., Hue, Vietnam
Bui Thanh Cong
University of Economics, Hue University, 99 Ho Dac Di St., Hue, Vietnam
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Keywords

Covid-19 pandemic
Vietnam
government intervention
stock market performance

Abstract

This study aims to investigate the impact of the COVID-19 pandemic and how the government’s intervention influenced the performance of the Vietnamese stock market, including Ho Chi Minh and Hanoi stock exchanges, at the whole market level and especially at the sector level. Panel data at the sector level is obtained from 31 January 2020 to 23 July 2021 and divided into four different periods corresponding to the COVID-19 waves in Vietnam. GARCH (1,1) is used to predict stock market volatility and the random effect is employed in the panel regression model. The findings show that while stock market returns on the Ho Chi Minh stock exchange did not witness a significant change before and during the pandemic, empirical result indicates that stock market returns on the Hanoi stock exchange significantly changed. Stock market volatilities indicate a significant increase once the pandemic occurs in Vietnam on both stock exchanges. Specifically, the magnitude of the Covid-19 influence weakens over time. More importantly, we find that the intervention of the Vietnamese government significantly lessens the influence of the Covid-19 pandemic on the stock market, especially in the fourth period corresponding to the ongoing wave of COVID 19. The results of this study might offer a useful reference for governors, investors, and other scholars in future public policies and empirical research.

https://doi.org/10.26459/hueunijed.v131i5B.6523
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