Food and beverage stocks responding to COVID-19

  • Received August 20, 2021;
    Accepted September 15, 2021;
    Published September 20, 2021
  • Author(s)
  • DOI
    http://dx.doi.org/10.21511/imfi.18(3).2021.30
  • Article Info
    Volume 18 2021, Issue #3, pp. 359-371
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This work is licensed under a Creative Commons Attribution 4.0 International License

This paper investigated how food and beverage (F&B) stocks react to COVID-19. The event study method was applied to four events including the first and second events, were the first COVID-19 positive patients detected in the largest and second-largest economic center of Vietnam. The third and fourth events are related to strong measures to prevent the spread of COVID-19: the nationwide lockdown at the beginning of the second quarter of 2020, and the lockdown of Danang at the beginning of the third quarter of 2020. The results show that the reaction of F&B stock prices to events supports the semi-strong form of efficient market theory. The strong and lasting negative reaction of F&B stocks to the first event can be explained by surprise (first case in Vietnam) and Hochiminh city’s economic engine driving role in the development of Vietnam’s economy. The study finds that heuristic decision-making from nationwide lockdowns (suppression of supply chains during lockdowns) can explain the sub-sector of farming-fishing-ranching products reacted more strongly to the lockdown event in Danang. Based on the research results, this paper provides some policy implications for managers and notes for securities investors.

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    • Table 1. Events related to COVID-19 in Vietnam in 2020
    • Table 2. Abnormal return (AR) and cumulative abnormal return (CAR) of the food and beverage industry related to the events on January 23, 2020, and March 6, 2020
    • Table 3. Abnormal return (AR) and cumulative abnormal return (CAR) of the food and beverage industry related to the events on April 1, 2020, and July 26, 2020
    • Conceptualization
      Lai Cao Mai Phuong
    • Data curation
      Lai Cao Mai Phuong
    • Formal Analysis
      Lai Cao Mai Phuong
    • Methodology
      Lai Cao Mai Phuong
    • Project administration
      Lai Cao Mai Phuong
    • Resources
      Lai Cao Mai Phuong
    • Validation
      Lai Cao Mai Phuong
    • Writing – original draft
      Lai Cao Mai Phuong
    • Writing – review & editing
      Lai Cao Mai Phuong