Entertainment Industry under Normalized Covid-19 Pandemic: An Empirical Evidence Based on Time-series Model

Zhixing Wu

doi:10.54691/bcpbm.v32i.2901

Authors

Zhixing Wu

DOI:

https://doi.org/10.54691/bcpbm.v32i.2901

Keywords:

Covid-19; Rate of return; Volatility; Entertainment.

Abstract

In January 2020, the coronavirus, known as COVID-19 launched the first strike in Wuhan China, shutting down the local economy and causing massive loss. The expeditious spread of COVID-19 then became a global epidemic. The ubiquitous virus is jeopardizing both home life and economical life. The main objective of this paper is to examine how tourism, catering, and hotel stock returns respond to the stress of the Covid-19 pandemic in Chinese market. Secondary data of 3 collective stocks as well as pandemic data for China and overseas have been collected from Choice.eastmoney.com and WHO website from 23rd January 2020 to 21st January 2021. This paper employs an ARMA model, a VAR model, and an ARMA-GARCH model for analyzing changes in market returns and volatility. This paper finds adverse effects of domestic pandemic on the three markets, with hospitality being the least affected one. Neither global nor Chinese newly confirmed cases significantly influence volatility in observed industries. The results are appliable for investors and policymakers.

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