Rathi, R N; Tulasi Devi, S L and Rajamalla, A P (2025) Evaluating the impact of lockdowns and interest rate cuts on construction stock price returns: A did approach. International Journal of Construction Management, 25(16), pp. 2051-2062. ISSN 1562-3599
Abstract
The effect of the novel coronavirus or COVID-19 has been a disruption globally. There are studies which describe how this virus influenced the stock market of various countries, but there is no sector-specific analysis. This research examines the influence of policy measures in response to COVID-19 outbreak on the stock market performance of construction companies in various countries chosen based on their implementation of policies aimed at containing the spread of COVID-19, in addition to those countries with the largest stock markets. The study compares the performance of the stock market before and after the implementation of lockdowns and interest rate cuts using causal inference [DiD approach]. The objective of the lockdown was to decelerate the propagation of the COVID-19 virus, while the implementation of a policy to reduce interest rates required to diminish the adverse economic consequences caused by the pandemic. The results indicate a significant increase in stock price returns after the announcement of policies, with lockdown measures showing a more pronounced impact compared to adjustments in interest rates. The study underscores the importance of timely policy measures in managing volatility in financial markets amidst crises, providing valuable insights for policymakers and investors in navigating uncertain economic conditions.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | COVID-19; interest rate cut; international financial markets; lockdown; monetary policy; stock prices |
| Index terms: | coronavirus, markets, implementation, policy measure, propagation, outbreak, economic condition, pandemic, investor, interest rate, construction company, COVID-19 |
| Subjects: | policy studies, organization, contractual arrangements, economic analysis, engineering process, health risk and incident analysis, health conditions and diseases, sociology |
| Topics: | Stakeholder Management, Governance, Business Strategy, Procurement, Health and Safety, Engineering Principles |
| Descriptive scope: | 2 PC |
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