Hog wild economics: assessing agricultural stock market reactions to African swine fever

Purpose The purpose of this study is to evaluate how global agricultural stock markets reacted to African Swine Fever (ASF) outbreaks in China and Germany in 2020, and to identify which agricultural sub-industries were most affected. The study also aims to provide insights into how market responses differ between major importing (China) and exporting (Germany) countries and is hence a comparative case analysis of these two specific ASF outbreaks. Design/methodology/approach An event study methodology is applied using daily data from a global agricultural MSCI Index. Cumulative abnormal returns (CAR) following these two ASF outbreak announcements are estimated for the full global agricultural MSCI Index and for four agricultural sub-industries and compared. Multiple model specifications and placebo events are used to test the robustness of these results. Findings The results show statistically significant negative CAR for the MSCI agricultural index following ASF outbreak announcements in both China and Germany, with stronger effects observed for the Chinese outbreak. The sub-industries “agricultural products and services” and “packaged foods and meats” primarily drive the negative market reactions in response to both outbreaks. These findings remain robust across alternative specifications. Practical implications The study highlights the vulnerability of global agricultural markets to animal disease outbreaks and underscores the need for investors, policymakers and firms to account for sector-specific and country-specific risk exposures. Understanding which sub-industries are most affected can support the development of targeted risk-mitigation and crisis-response strategies. Originality/value This study provides the first comprehensive assessment of ASF’s impact on the global agricultural sector using a broad-based agricultural MSCI Index. By comparing market reactions between a major importer (China) and a major exporter (Germany) and examining heterogeneous effects across sub-industries, it offers novel insights into investor behavior and the economic consequences of animal disease outbreaks.