Risk and Financial Management of COVID-19 in Business, Economics and Finance

A special issue of Journal of Risk and Financial Management (ISSN 1911-8074). This special issue belongs to the section "Risk".

Deadline for manuscript submissions: closed (29 April 2022) | Viewed by 42897

Special Issue Editors


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Guest Editor
1. Department of Finance, Fintech & Blockchain Research Center, Big Data Research Center, Asia University, Taichung City 41354, Taiwan
2. Department of Medical Research, China Medical University Hospital, Taichung City 40447, Taiwan
3. Department of Economics and Finance, The Hang Seng University of Hong Kong, Hong Kong, China
Interests: behavioral models; mathematical modeling; econometrics; energy economics; equity analysis; investment theory; risk management; behavioral economics; operational research; decision theory; environmental economics; public health; time series analysis; forecasting
Special Issues, Collections and Topics in MDPI journals

E-Mail Website
Guest Editor
1. Department of Applied Economics and Department of Finance, National Chung Hsing University, Taichung 402, Taiwan
2. Department of Finance, College of Management, Asia University, Taichung 41354, Taiwan
Interests: economics; econometrics; financial econometrics; statistics; quantitative finance; risk and financial management; energy economics and finance; time series analysis; forecasting; technology and innovation; industrial organization; health and medical economics; tourism research and management
Special Issues, Collections and Topics in MDPI journals

E-Mail Website
Guest Editor
Department of Finance, College of Management, Asia University, Taichung 41354, Taiwan
Interests: economics; financial econometrics; quantitative finance; risk and financial management; econometrics; statistics; time series analysis; energy economics and finance; sustainability; environmental modelling; carbon emissions; climate change econometrics; forecasting; informatics; data mining
Special Issues, Collections and Topics in MDPI journals

Special Issue Information

Dear Colleagues,

The COVID-19 disease, caused by the SARS-CoV-2 coronavirus, has resulted in a pandemic that represents the most significant change in the world order over the past century, with incalculable impacts on the world’s economy, social development, business, risk, financial management, and financial markets. COVID-19 has generated great uncertainty, which leads to fear. The COVID-19 pandemic has affected travel, supply chains, consumption, production, operations, valuations, security, financial stress, and the prices of all products, including fossil fuel and renewable energy sources.

A Special Issue of the Journal of Risk and Financial Management (JRFM) on “Risk and Financial Management of COVID-19 in Business, Economics, and Finance”, edited by Chia-Lin Chang, Michael McAleer, and Alan Wing-Keung Wong, will be devoted to this topic. This Special Issue will bring together practical, state-of-the-art applications of mathematics, probability, and statistical techniques to address this issue.

This Special Issue will foster and promote state-of-the-art research on any COVID-19 issues related to risk and financial management in:

  • Business
  • Economics
  • Finance

The Guest Editors invite investigators to contribute original research articles on “Risk and Financial Management of COVID-19 in Business, Economics, and Finance”. All submissions must contain original, unpublished work not being considered for publication elsewhere.

Prof. Dr. Wing-Keung Wong
Prof. Dr. Chia-Lin Chang
Prof. Dr. Michael McAleer
Guest Editors

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All submissions that pass pre-check are peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 100 words) can be sent to the Editorial Office for announcement on this website.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are thoroughly refereed through a single-blind peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. Journal of Risk and Financial Management is an international peer-reviewed open access monthly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 1400 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

Published Papers (8 papers)

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Editorial

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7 pages, 201 KiB  
Editorial
Risk and Financial Management of COVID-19 in Business, Economics and Finance
by Chia-Lin Chang, Michael McAleer and Wing-Keung Wong
J. Risk Financial Manag. 2020, 13(5), 102; https://doi.org/10.3390/jrfm13050102 - 20 May 2020
Cited by 59 | Viewed by 18534
Abstract
The SARS-CoV-2 coronavirus that causes the COVID-19 disease led to the most significant change in the world order over the past century, destabilizing the global economy and financial stock markets, the world’s economy, social development, business, risk, financial management and financial markets, among [...] Read more.
The SARS-CoV-2 coronavirus that causes the COVID-19 disease led to the most significant change in the world order over the past century, destabilizing the global economy and financial stock markets, the world’s economy, social development, business, risk, financial management and financial markets, among others. COVID-19 has generated great uncertainty, and dramatically affected tourism, travel, hospitality, supply chains, consumption, production, operations, valuations, security, financial stress and the prices of all products, including fossil fuel and renewable energy sources. This Editorial introduces a Special Issue of the Journal of Risk and Financial Management (JRFM) on the “Risk and Financial Management of COVID-19 in Business, Economics and Finance”. This Special Issue will attract practical, state-of-the-art applications of mathematics, probability and statistical techniques on the topic, including empirical applications. This paper investigates important issues that have been discussed in tourism, global health security and risk management in business as well as the social and medical sciences. Full article

Research

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17 pages, 789 KiB  
Article
The Economic Policy Uncertainty and Its Effect on Sustainable Investment: A Panel ARDL Approach
by Susilo Nur Aji Cokro Darsono, Wing-Keung Wong, Tran Thai Ha Nguyen and Dyah Titis Kusuma Wardani
J. Risk Financial Manag. 2022, 15(6), 254; https://doi.org/10.3390/jrfm15060254 - 07 Jun 2022
Cited by 12 | Viewed by 3711
Abstract
This study examines the effect of economic policy uncertainty (EPU) on sustainable investment returns by using panel data of stock market returns and the EPU index from twelve countries for the period from April 2015 to December 2020. In addition, precious metal prices, [...] Read more.
This study examines the effect of economic policy uncertainty (EPU) on sustainable investment returns by using panel data of stock market returns and the EPU index from twelve countries for the period from April 2015 to December 2020. In addition, precious metal prices, energy prices, and cryptocurrency prices are used as control variables. To do so, we investigate the impact of EPU, gold prices, oil prices, and Bitcoin prices on stock market returns by using the panel autoregressive distributed lag (ARDL) model to examine both the long-run correlation and short-run effect. Our findings show that EPU, gold prices, oil prices, and Bitcoin prices have a time-varying significant impact on sustainable stock market returns. We discovered that EPU has a significantly negative impact on the returns of the sustainable stocks in the markets over the long run. In contrast, the rise of the gold price, oil price, and Bitcoin price have a significantly positive impact on the returns of the sustainable stocks in the twelve sustainable markets in the long run. On the other hand, EPU in Singapore, Spain, the Netherlands, and Russia has a significant short-run impact on market returns in each country. Based on the findings, managers and investors in the sustainable stock markets are highly recommended to pay more attention to the volatility of EPU, gold prices, oil prices, and Bitcoin prices in the short run to control the risk of returns in the sustainable stock market. Furthermore, policymakers must closely monitor the movement of the EPU index, as it is a major driver of sustainable stock market returns. Full article
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11 pages, 1191 KiB  
Article
Dynamic Causality Analysis of COVID-19 Pandemic Risk and Oil Market Changes
by Mike K. P. So, Jacky N. L. Chan and Amanda M. Y. Chu
J. Risk Financial Manag. 2022, 15(6), 240; https://doi.org/10.3390/jrfm15060240 - 27 May 2022
Viewed by 1636
Abstract
Crude oil draws attention in recent research as its demand may indicate world economic growth trend in the post-COVID-19 era. In this paper, we study the dynamic lead–lag relationship between the COVID-19 pandemic and crude oil future prices. We perform rolling-sample tests to [...] Read more.
Crude oil draws attention in recent research as its demand may indicate world economic growth trend in the post-COVID-19 era. In this paper, we study the dynamic lead–lag relationship between the COVID-19 pandemic and crude oil future prices. We perform rolling-sample tests to evidence whether two pandemic risk scores derived from network analysis, including a preparedness risk score and a severity risk score, Granger-cause changes in oil future prices. In our empirical analysis, we observe 49% to 60% of days in 2020 to 2021 during which the pandemic scores significantly affected oil futures. We also find an asymmetric lead–lag relationship, indicating that there is a tendency for oil futures to move significantly when the pandemic is less severe but not when it is more severe. This study adopts preparedness risk score and severity risk score as proxy variables to measure the impact of the COVID-19 pandemic risk on oil market. The asymmetric lead–lag behavior between pandemic risk and oil future prices provides insights on oil demand and consumption during the COVID-19 pandemic. Full article
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26 pages, 1501 KiB  
Article
The Relationship between Risk Perception and Risk Definition and Risk-Addressing Behaviour during the Early COVID-19 Stages
by Simon Grima, Bahattin Hamarat, Ercan Özen, Alessandra Girlando and Rebecca Dalli-Gonzi
J. Risk Financial Manag. 2021, 14(6), 272; https://doi.org/10.3390/jrfm14060272 - 17 Jun 2021
Cited by 12 | Viewed by 4830
Abstract
The purpose of this article is to show the effect of Risk Perception RP and Risk Definition RD on the Risk-Addressing Behaviour RB. To carry out this study secondary data was used from a semi-structured survey administered between February and June 2020, a [...] Read more.
The purpose of this article is to show the effect of Risk Perception RP and Risk Definition RD on the Risk-Addressing Behaviour RB. To carry out this study secondary data was used from a semi-structured survey administered between February and June 2020, a period during the early stages of the COVID-19 pandemic. The study identified six dimensions of risk perception and thus tested six structural models. Risk perception (ξ RP) is defined as an external latent variable in the study. It is also assumed that the risk perception variable may affect the risk definition variable (η RD). The application software SmartPLS was used to analyse data through exploratory factor analysis and partial least squares structural equation modelling on our research model. To achieve Convergent validity of the structural equation model of partial least squares, three criteria were met. In the study, Discriminant Validity was examined using the Fornell-Larcker criterion and Heterotrain-Monotrait Ratio (HTMT) coefficients. Results reveal that there is no direct relationship between the RB and “religion and beliefs”, the “fear level, the experience”, the “peer influences level” and the “openness”. However, we found a positive relationship between the agreement on “knowledge” and on RB and statistically significant relationships between the agreement on the RD and the agreement on the “religion and beliefs”, the “fear level”, the “experience”, the “knowledge”, the “peer influences level” and the RB. Moreover, there is an indirect relationship when controlling for the agreement on the RD between the agreement on the RB and the agreement on the “fear level”, the “experience”, the “knowledge” and the “peer influences level”. However, there is no relationship between the agreement on the “openness” and the agreement on the RB and a statistically significant but moderate relationship between the agreement on the RD and the agreement on the RB. Although, there seems to be abundant research on RP, so far we have found only a few studies on the influencing factors of RP, as effected by RB and RD, especially in distressed times such as during this current pandemic period of COVID-19. This study adds to body of literature and sheds new light on the interaction between RP, RB and RD in a time of distress. It provides important and original information that may be useful for government agencies, businesses, individuals, and the media when setting policies, governance structures, regulations, procedures and determining how to communicate. Full article
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27 pages, 507 KiB  
Article
The Impact of COVID-19 and Its Policy Responses on Local Economy and Health Conditions
by Ali Gungoraydinoglu, Ilke Öztekin and Özde Öztekin
J. Risk Financial Manag. 2021, 14(6), 233; https://doi.org/10.3390/jrfm14060233 - 22 May 2021
Cited by 10 | Viewed by 2267
Abstract
US states have implemented lockdown measures to contain the COVID-19 pandemic. We assess the impact of state policy responses on local economic and health conditions, with the goal to shed light on marginal health benefits and economic costs associated with social distancing. We [...] Read more.
US states have implemented lockdown measures to contain the COVID-19 pandemic. We assess the impact of state policy responses on local economic and health conditions, with the goal to shed light on marginal health benefits and economic costs associated with social distancing. We find that lockdown measures are effective in alleviating disease severity, but yield significant contraction of the economy. Deteriorating health conditions are disruptive to the labor supply, financial health, and economic output. The adverse economic impact of lockdowns exceeds the economic damage brought by the disease itself, but health conditions better forecast economic contraction outcomes. Full article
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12 pages, 241 KiB  
Article
Factors Inhibiting Effective Risk Management in Emerging Market SMEs
by Oscar Chakabva, Robertson Tengeh and Job Dubihlela
J. Risk Financial Manag. 2021, 14(6), 231; https://doi.org/10.3390/jrfm14060231 - 21 May 2021
Cited by 3 | Viewed by 2979
Abstract
Despite the anecdotal evidence that suggests that SMEs adopt inadequate and ineffective risk management practices, only a few studies have been conducted on the topic in the emerging market context. Besides, the existing studies on factors inhibiting effective risk management in emerging market [...] Read more.
Despite the anecdotal evidence that suggests that SMEs adopt inadequate and ineffective risk management practices, only a few studies have been conducted on the topic in the emerging market context. Besides, the existing studies on factors inhibiting effective risk management in emerging market SMEs are devoid of any theoretical grounding. This situation implies that there is still a knowledge gap on this area, and this gap is what the current paper seeks to close. In closing out the gap, this paper used the Resource Based View theory to interpret the results obtained, in order to help clarify the factors inhibiting effective risk management in emerging market SMEs, with a case of South Africa being used. In a first step, questionnaires were distributed to a sample of 320 FMCG SMEs in the Cape Metropolitan area. The results revealed the significance of both intangible and tangible resources in positively impacting the effectiveness of risk management within SMEs. This led to the conclusion that owner-managers must pay particular attention to their intangible and tangible resource structure, which will impact the positive response towards superior performance and competitive advantage by focusing more on coalescing resources that lead to effective risk management. Full article
12 pages, 268 KiB  
Article
The Nexus between Financial Performance and Equilibrium: Empirical Evidence on Publicly Traded Companies from the Global Financial Crisis Up to the COVID-19 Pandemic
by Larissa Batrancea
J. Risk Financial Manag. 2021, 14(5), 218; https://doi.org/10.3390/jrfm14050218 - 12 May 2021
Cited by 7 | Viewed by 3865
Abstract
Financial performance and financial equilibrium are two key aspects that should be monitored by any business manager interested in passing the test of time and overcoming unpredictable events such as economic crises. The organic link between financial performance and financial equilibrium has rarely [...] Read more.
Financial performance and financial equilibrium are two key aspects that should be monitored by any business manager interested in passing the test of time and overcoming unpredictable events such as economic crises. The organic link between financial performance and financial equilibrium has rarely been studied in the long run for companies listed on the stock market. The present article fills this gap in the literature by examining the degree to which financial performance influenced long-term financial equilibrium using data from 34 major companies publicly traded on the New York Stock Exchange and operating around the world in a wide variety of industries and sectors. The period of analysis spread over a decade (2007Q1–2020Q3) in order to cover two major crises that have marked the dawn of the third millennium and occurred relatively close to one another: the 2008 financial meltdown and the COVID-19 pandemic crisis. By means of panel data modelling, the study showed that the short-term and long-term financial equilibria of these public companies measured by current ratio, quick ratio and debt to equity ratio were significantly impacted by different financial performance indicators. The study addresses various implications of the empirical results and lays out avenues for future research. Full article
29 pages, 677 KiB  
Article
The Exposure of French and South Korean Firm Stock Returns to Exchange Rates and the COVID-19 Pandemic
by Willem Thorbecke
J. Risk Financial Manag. 2021, 14(4), 154; https://doi.org/10.3390/jrfm14040154 - 01 Apr 2021
Cited by 6 | Viewed by 2906
Abstract
Rogoff predicted that the U.S. dollar will depreciate and that exchange rate volatility will return. The coronavirus crisis has also roiled the world economy. This paper investigates the exposure of French and Korean firm stock returns to exchange rate appreciations and the pandemic. [...] Read more.
Rogoff predicted that the U.S. dollar will depreciate and that exchange rate volatility will return. The coronavirus crisis has also roiled the world economy. This paper investigates the exposure of French and Korean firm stock returns to exchange rate appreciations and the pandemic. Both France and Korea are major exporters, but Korea has managed the crisis better than France. The results indicate that Korean firms have come through the pandemic better than French firms. The findings also indicate that the Korean economy is less exposed to appreciations than the French economy. This paper concludes with suggestions to increase firms’ resilience to these shocks. Full article
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