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Finance research letters
Jan, 2021;38 101873.

Trust and stock market volatility during the COVID-19 crisis.

Nils Engelhardt, Miguel Krause, Daniel Neukirchen, Peter N Posch
Author Information
  1. Nils Engelhardt: TU Dortmund University, Faculty of Business and Economics, Chair of Finance, Otto-Hahn-Str. 6, Dortmund 44227, Germany.
  2. Miguel Krause: TU Dortmund University, Faculty of Business and Economics, Chair of Finance, Otto-Hahn-Str. 6, Dortmund 44227, Germany.
  3. Daniel Neukirchen: TU Dortmund University, Faculty of Business and Economics, Chair of Finance, Otto-Hahn-Str. 6, Dortmund 44227, Germany.
  4. Peter N Posch: TU Dortmund University, Faculty of Business and Economics, Chair of Finance, Otto-Hahn-Str. 6, Dortmund 44227, Germany.
PMID: 36569649 DOI: 10.1016/j.frl.2020.101873

Abstract

We investigate if trust affects global stock market volatility during the COVID-19 pandemic. Using a sample of 47 national stock markets, we find the stock markets' volatility to be significantly lower in high-trust countries (in reaction to COVID-19 case announcements). Both trust in fellow citizens as well as in the countries' governments are of significant importance.

Keywords

COVID-19 Financial markets Trust Volatility

References

  1. Financ Res Lett. 2020 Jul;35:101597 [PMID: 32550842]
  2. J Behav Exp Finance. 2020 Sep;27:100326 [PMID: 32292707]
  3. Financ Res Lett. 2020 Oct;36:101528 [PMID: 32837360]
  4. Financ Res Lett. 2021 Jan;38:101699 [PMID: 32837380]
  5. Financ Res Lett. 2020 Oct;36:101671 [PMID: 32837375]
Journal Article

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