Shaking Stability: COVID-19 Impact on the Visegrad Group Countries’ Financial Markets
1
Department of Econometrics and Statistics, Institute of Economics and Finance, Warsaw University of Life Sciences-SGGW, Nowoursynowska 166, 02-787 Warsaw, Poland
2
Department of Economics and Economic Policy, Institute of Economics and Finance, Warsaw University of Life Sciences-SGGW, Nowoursynowska 166, 02-787 Warsaw, Poland
3
Department of Economics, Faculty of Economics and Management, Czech University of Life Sciences Prague, Kamýcka 129, 16500 Prague, Czech Republic
4
Department of Languages, Faculty of Economics and Management, Czech University of Life Sciences Prague, Kamýcka 129, 16500 Prague, Czech Republic
*
Author to whom correspondence should be addressed.
Sustainability 2020, 12(15), 6282; https://doi.org/10.3390/su12156282
Received: 2 July 2020 / Revised: 30 July 2020 / Accepted: 3 August 2020 / Published: 4 August 2020
(This article belongs to the Section Economic and Business Aspects of Sustainability)
The recent outbreak of the coronavirus pandemic has made a significant impact on the global financial markets. The aim of this paper is to assess the short-term reaction of the Visegrad countries’ financial markets to the COVID-19 pandemic. The Visegrad Group is a political alliance of four Central European countries, namely Czechia, Hungary, Poland, and Slovakia. The financial assessment is based on the EUR/CZK, EUR/HUF, and EUR/PLN exchange rates and the major blue-chip stock market indices, that is Prague PX, Budapest BUX, Warsaw WIG20, and Bratislava SAX. It is evident that the ongoing pandemic has changed the expectations of the financial market participants about the future value of exchange rates in the Visegrad countries. This study indicates that, as a consequence of COVID-19, higher probability has been attached to the large depreciation of the Czech koruna (CZK), the Hungarian forint (HUF), and the Polish zloty (PLN) than to their large appreciation. Moreover, based on the TGARCH model, the positive and significant correlation between the number of reported COVID-19 cases and the exchange rates has been confirmed, implying that the ongoing pandemic has resulted in the depreciation of the Visegrad currencies. Additionally, the result of the TGARCH model reveals that there is a significant and negative link between the Visegrad stock market indices and the COVID-19 spread.
View Full-Text
Keywords:
COVID-19; coronavirus; SARS-CoV-2; Visegrad Group (V4); government response; financial markets; macroeconomic indicators; Czechia; Poland; Slovakia; Hungary
▼
Show Figures
Figure 1
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited
MDPI and ACS Style
Czech, K.; Wielechowski, M.; Kotyza, P.; Benešová, I.; Laputková, A. Shaking Stability: COVID-19 Impact on the Visegrad Group Countries’ Financial Markets. Sustainability 2020, 12, 6282. https://doi.org/10.3390/su12156282
AMA Style
Czech K, Wielechowski M, Kotyza P, Benešová I, Laputková A. Shaking Stability: COVID-19 Impact on the Visegrad Group Countries’ Financial Markets. Sustainability. 2020; 12(15):6282. https://doi.org/10.3390/su12156282
Chicago/Turabian StyleCzech, Katarzyna, Michał Wielechowski, Pavel Kotyza, Irena Benešová, and Adriana Laputková. 2020. "Shaking Stability: COVID-19 Impact on the Visegrad Group Countries’ Financial Markets" Sustainability 12, no. 15: 6282. https://doi.org/10.3390/su12156282
Find Other Styles
Note that from the first issue of 2016, MDPI journals use article numbers instead of page numbers. See further details here.
