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The impact of COVID-19 on conventional and Islamic stocks: empirical evidence from Pakistan

The impact of COVID-19 on conventional and Islamic stocks: empirical evidence from Pakistan The purpose of this study is to investigate the impact of COVID-19 on conventional and Islamic stocks by using the data spanning from February 25, 2020, to February 3, 2021, and employing a panel regression approach.Design/methodology/approachIn this study a panel regression approach has been used.FindingsThe study finds a negative association between COVID-19 and stock (both Islamic and conventional). After splitting the data into 1st and 2nd waves, the relationship between COVID-19 and stock (both Islamic and conventional) remains the same (negative) in the case of the 1st wave. In contrast, in the case of the 2nd wave, the relationship turned out to be positive. During both waves of the pandemic, the magnitude of the effect is found to be higher for conventional stocks. Additionally, the study also analyzes the aggregate influence of COVID-19 on different sectors and finds that commercial banks, oil and gas exploration and marketing companies are the most influenced sectors. At the same time, automobiles and pharma are the least affected sectors.Practical implicationsThe study suggests that markets start gaining momentum to reach their prepandemic level after absorbing the initial shock (emergence of a pandemic). The study also provides thorough insights for market regulators and policymakers by implying the dynamic relations between markets (conventional and Islamic) and financial crisis, which would allow them more effective control of crisis in future endeavors.Originality/valueThis is one of the first studies to investigate the impact of COVID-19 on both conventional and Islamic stocks, especially in the context of Pakistan. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Economic and Administrative Sciences Emerald Publishing

The impact of COVID-19 on conventional and Islamic stocks: empirical evidence from Pakistan

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References (67)

Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
2054-6238
eISSN
2054-6246
DOI
10.1108/jeas-09-2021-0180
Publisher site
See Article on Publisher Site

Abstract

The purpose of this study is to investigate the impact of COVID-19 on conventional and Islamic stocks by using the data spanning from February 25, 2020, to February 3, 2021, and employing a panel regression approach.Design/methodology/approachIn this study a panel regression approach has been used.FindingsThe study finds a negative association between COVID-19 and stock (both Islamic and conventional). After splitting the data into 1st and 2nd waves, the relationship between COVID-19 and stock (both Islamic and conventional) remains the same (negative) in the case of the 1st wave. In contrast, in the case of the 2nd wave, the relationship turned out to be positive. During both waves of the pandemic, the magnitude of the effect is found to be higher for conventional stocks. Additionally, the study also analyzes the aggregate influence of COVID-19 on different sectors and finds that commercial banks, oil and gas exploration and marketing companies are the most influenced sectors. At the same time, automobiles and pharma are the least affected sectors.Practical implicationsThe study suggests that markets start gaining momentum to reach their prepandemic level after absorbing the initial shock (emergence of a pandemic). The study also provides thorough insights for market regulators and policymakers by implying the dynamic relations between markets (conventional and Islamic) and financial crisis, which would allow them more effective control of crisis in future endeavors.Originality/valueThis is one of the first studies to investigate the impact of COVID-19 on both conventional and Islamic stocks, especially in the context of Pakistan.

Journal

Journal of Economic and Administrative Sciences – Emerald Publishing

Published: Nov 27, 2024

Keywords: COVID-19; Islamic stocks; Pakistan

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