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Stock markets are always affected by major events and uncertainties, including the COVID-19 pandemic. Its impact on the stock markets around the globe has been addressed in various studies. However, there is a need to set a benchmark for contemporary research by taking a holistic perspective of the findings of the leading researchers. It is important because the stock markets are sensitive to economic, social, natural, political, and environmental shocks and uncertainties. The information about historical trends, themes, and forests is essential because it urges investors to make decisions about buying, selling, and holding the investment portfolio according to the situation of the respective stock markets. Furthermore, projections on stock markets may assist the administration in making the best policy to stabilize the state’s finances and economy.

This research aims to consolidate the literature published on the COVID-19 crisis’s impact on global stock markets to gain managerial implications from the crisis. It performs a thematic bibliometric review of the literature published in Scopus-ranked journals since the beginning of the pandemic using FCWI, Piecharts, and VOSViewer. It identifies the most under-researched regions and eight emerging sub-themes.

This study makes significant contributions to the literature in the following ways. First, this is the first comprehensive attempt to consolidate the quality literature on the COVID-19 impact on the stock market. This research also makes consolidated policy recommendations for globally coordinated efforts and for handling the COVID-19 crisis with reference to the stock markets.

This study identifies that all eight sub-themes of the research are the future research directions in all and specifically in the South American, African, South East Asian, and Oceania regions till the crisis continues. The eight sub-themes are “Market Behavior Return, Liquidity & Volatility”, “Forecasting”, “Corporate Moves and Stock Returns”, “COVID News & Media”, “Safe Haven”, “Culture and COVID-19”, “Herding Spill Over & Connectedness”, and “Government Reaction”. The research finds that the benchmark theme is market behavior during the COVID-19 crisis, whereas an emerging benchmark theme is the markets after the COVID-19 crisis. The holistic view of the literature supporting eight sub-themes suggests that the government’s role is of utmost importance to handle the impact of the COVID-19 crisis.

The analysis suggests that the most researched region is North America, followed by East Asia, led by China. The review of the literature suggests that contemporary research has primarily focused on the periods at the beginning of the pandemic, that is, the period between January to May 2020. Very few studies have been conducted on the comparison of the COVID-19 crisis with the global financial crisis of 2008 and other similar crises.

This research suffers from a number of limitations: the first is the use of the Scopus database and Web of Science (WOS) only. More comprehensive research, taking manuscripts from Google Scholar, etc., may bring more comprehensive results. Another major limitation of the research is the length of time. Because of the very nature of a pandemic of less than two years at present, the manuscripts published are only between the years 2020 and 2021. Therefore, continuous effort is required to keep the topic updated in the years to come.

Author: Bayu Arie Fianto, S.E., MBA., Ph.D.

Further details about the study can be viewed here:

Fianto, B.A., Ridhwan, M.M., Shah, S.A.A., Faris, M., Ruslan, R.A.H.M. Response of Financial Markets to COVID-19 Pandemic: A Review of Literature on Stock Markets. Emerging Science Journal.