Does state ownership matter for share price performance during the pandemic crisis in an emerging market?

Purpose The study aims to investigate the impact of state ownership on company market performance, i.e. on share price returns and volatility, during the COVID-19 pandemic. Design/methodology/approach The study analyzes data from 125 companies listed on the Warsaw Stock Exchange between 2019 and 2020. Cumulative abnormal rates of return and quarterly standard deviation are used to measure investment return and price volatility. Panel ordinary least square regression models assess the influence of state ownership on stock market dynamics. Findings Our findings indicate that state ownership has a dual impact on share prices: it reduces both share price growth and volatility. The significant reduction in share price volatility provides evidence that state ownership enhances stability in uncertain market conditions, benefiting from governmental support. Practical implications Our findings convey to investors that state ownership promotes share price stability but may not lead to substantial increases in market value. To maintain a stable SOE share price, the state as a shareholder should be credible to investors, i.e. act transparently and inform the market about planned activities. Originality/value Previous studies concentrate mainly on the impact of state ownership on financial performance during the pandemic, while in a much lesser scope on market performance. We contribute to the literature by providing a more comprehensive understanding of the impact of state ownership on corporate market performance, particularly during the pandemic, through the lens of agency theory and resource-based theory.