Stock market’ reaction of global e-commerce listed firms: an event study for different phases of COVID-19 pandemic

Purpose This article examines the short-term market reaction of global e-commerce firms around different phases of COVID-19. Design/methodology/approach The authors examine the impact of different phases of COVID-19 on global e-commerce firms using an event study methodology. Findings We find a positive and statistically significant reaction of e-commerce firms to the first case of COVID-19, to the declaration of global health emergency by the WHO, the three waves of COVID-19 contamination and to the good results of Pfizer vaccine trials. The disruption caused by COVID-19 in retail, the accelerated trend towards electronic commerce and the strong link between self-intention to self-isolate and intention to make unusual purchases, may explain the positive reaction of e-commerce stocks in the first phase of COVID-19. The restored opportunity to spend and pent-up demand tend to explain the positive market returns found in the last phase of the COVID-19 pandemic. In contrast, the declaration of COVID-19 as a global pandemic and the lockdown announcements in each country seem to be bad news for e-commerce firms, which observe an abnormal negative and statistically significant return. The reduction of consumer expenses and precautionary savings to self-insure against the risk of unemployment tends to explain these results. These reactions are reinforced or mitigated by firm-specific characteristics such as liquidity, profitability, leverage and e-commerce main activity. Originality/value To our best knowledge, it is the first study that analyses the impact of different phases of COVID-19 on the market returns of e-commerce global firms. This study intends to fill this gap in the literature.