STOCK PRICES AND COVID-19 STIMULUS POLICIES: EVIDENCE FROM TOURISM AND HOSPITALITY INDUSTRY

This study examines the impact of economic stimulus policies on tourism-related firms’ stock prices, after movement restriction announcements, and differences in the relationships between economic policy responses and stock prices for large firms vis-à-vis small firms. Using a cross-section data of 888 firms from 56 countries listed on several stock exchanges, we find a positive and significant association between the COVID-19 economic stimulus index and 1- and 2-week average changes in tourism firms’ stock prices after movement restriction announcements. Tourism firms’ stock prices responded favorably to the introduction of macro-financial packages and monetary policies. This study complements the literature on stock market reactions during the pandemic and contributes to the growing body of literature examining its overall effect.