The impact of the COVID-19 outbreak on Japanese shipping industry: An event study approach

• Published in: Transport policy Vol. 130; pp. 130 - 140
• Main Authors: Sakawa, Hideaki, Watanabel, Naoki
• Format: Journal Article
• Language: English
• Published: Netherlands Elsevier Ltd 01.01.2023
• Subjects: COVID-19; Event study method; Japan; Shipping industry; COVID-19; Event study method; Japan; Shipping industry
• ISSN: 0967-070X; 1879-310X
• DOI: 10.1016/j.tranpol.2022.11.002

This paper examines the stock market response of Japanese shipping firms on the COVID-19 outbreak. We adopt an event study method to investigate the announcement effect of COVID-19-related news such as the incident of largest numbers of cases in a cruise ship, the Princess Diamond on February 3, 2020 and the tight border closing by the Japanese Government on March 9, 2020. Our empirical results show that the negative abnormal returns are significant for both of these pessimistic COVID-19-related events. The negative return on the incident of Princess Diamond persisted for 30 trading days. Moreover, the negative abnormal return of port operations was stronger than maritime transportation after 30 days. Furthermore, we find that the tight border closing policy persisted for only eight trading days. Finally, we find that government policy responses are effective to mitigate negative announcement effects on COVID-related news post the tightened border control. •The negative abnormal returns in Japanese shipping firms are observed for pessimistic COVID-19 events.•The negative abnormal returns of port operations are stronger than maritime transportation.•Government policy responses are effective to mitigate negative announcement effects on COVID-related news.