Sammendrag
The study examines how the coronavirus outbreak impacted the Norwegian economy in 2020 by using event study methodology. The coronavirus spread rapidly across Europe during the first quarter of 2020, and reached Norway Late February. This forced many economic sectors into a state of hibernation.
The data sample consists of all companies on the Oslo stock exchange that were listed prior to 2019, which results in 210 companies. The market model with Scholes-Williams beta estimation was utilised to estimate the normal performance of each company, and was aggregated to form industries following the Global Industry Classification Standard. This data was later used to determine the average abnormal return for each industry.
Three major coronavirus announcements were investigated, which include the first lockdown of Norway, the gradual reopening, and the effective vaccine announcement. Overall, the market valued each industry differently for each event. The results indicate that the first lockdown and the effective vaccine announcement had the greatest impact on the Norwegian stock market. Moreover, findings confirm that in most cases the market had a delayed reaction to the events. In some cases, the market was even able to predict the events prior to their occurrence.