Comparative Analysis of the Financial Performance of Jordanian-listed

Companies during and after the covid-19 Pandemic

ABDALWALI LUTFI1,2,3,4,*, NASHAT ALI ALMASRIA5*, HASSAN H ALDBOUSH6,

MOHAMMED FAISAL HASSAN2, MAHMAOD ALRAWAD7,8,

FADYA BURHAN ALHAJAHMAD9,

1College of Business Administration,

The University of Kalba,

Kalba,

UNITED ARAB EMIRATES

2Business Administration Department,

King Faisal University,

KINGDOM OF SAUDI ARABIA

3MEU Research Unit,

Middle East University,

JORDAN

4Applied Science Research Center,

Applied Science Private University,

JORDAN

5College of Business Administration,

A’Sharqiyah University,

OMAN

6Faculty of Business,

Philadelphia University,

JORDAN

7Quantitative Method Department,

King Faisal University,

KINGDOM OF SAUDI ARABIA

8College of Business Administration and Economics,

Al-Hussein Bin Talal University,

JORDAN

9College of Business Administration,

The World Islamic Science and Education University,

JORDAN

*Corresponding Author

Abstract: - One of the main financial management issues in the world is determining factors that influence the

return of the stock exchange, which has been the subject of numerous studies recently. Although this topic is

one of the most explored in accounting and finance in recent years, there is still a scarcity of investigations on

the developing markets- especially making a comparison during and after the pandemic. Therefore, the key

objective of the current study is to shed light on the effects of the COVID-19 epidemic on the returns of the

stock markets of the Jordan Stock Exchange sectors. Specifically, it examines the effect of COVID-19 on the

WSEAS TRANSACTIONS on BUSINESS and ECONOMICS

DOI: 10.37394/23207.2024.21.121

Abdalwali Lutfi, Nashat Ali Almasria,

Hassan H Aldboush, Mohammed Faisal Hassan,

Mahmaod Alrawad, Fadya Burhan Alhajahmad

E-ISSN: 2224-2899

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banking, industry, insurance, and services sectors in the Jordanian stock markets for the period from 2020 until

2022, daily, at a rate of (512) trading days for the Jordanian Stock Exchange. The analysis was conducted using

regression analysis. The results supported the number of new daily cases of COVID-19 in Jordan had a positive

impact on the returns of the most affected industry sector, then the banking sector, followed by the services

sector. However, it hurts the insurance sector. The return of the stock exchange appears to be more sensible to

newfound cases of infection with the Coronavirus. In contrast, the new deaths from the Coronavirus do not

influence the sectors of the Jordanian Stock Exchange. This study results revealed that the Jordan Stock

Exchange sectors are facing challenges in terms of the restrictions on economic activities, which ultimately

influence the stock return. This study's results contribute to various concerned parties, investors, authorities,

researchers, and financial analysts alike in thoughtful consideration of the existing practices of the returns of

the stock exchange, assisting them in reviewing and reconsidering the applied accounting standards and

enlightening the financial report credibility in the Jordanian market. The present study suggests that firms

uphold financial aspects and metrics and oversee them during any pandemic or any similar events, and stock

market decision-makers need to develop strategies for minimizing the disparities in financial performance

during and post-pandemic periods. Added to these, the study provides information that policymakers, investors,

and the whole society may find useful concerning the adverse effects of natural disasters on the economies to

lay down best practices in risk management strategies and crisis adaptability.

Key-Words: - COVID pandemic; Stock Markets; Returns of the Stock Market; Return on Asset; Return on

Investment; Growth; Industry Effect; Sector Index.

Received: September 25, 2023. Revised: April 25, 2024. Accepted: May 23, 2024. Published: June 18, 2024.

1 Introduction and Background

The global effects of the Covid-19 pandemic have

turned into a monumental challenge for both

healthcare and economies as it permeates the entire

financial sectors, [1], [2], [3], [4], [5], [6]. In the

context of the stock market, major incidents are

cause for instant response, [7], [8] and this has been

exemplified during the pandemic crisis leading to

the decline in economic activities after which the

value of enterprises plummeted, [9], [10], [11], [12].

It is undeniable that the Covid-19 pandemic has led

to a long-term crisis involving every country around

the globe, permeating every social, economic, health

and financial sector, [13], [14], [15], [16]. In the

financial sector, the regulatory and supervisory

entities have emphasized the long-term damage

wrought by the pandemic, with the majority of the

countries’ stock markets experiencing sharp

declines since its outbreak, and this holds for

Jordan, [17], [18], [19], [20]. Stock returns have

been disturbed by the pandemic in different ways

based on industry, [21], [22]. Since the past

recession that spanned from 1929 to 1931, the 2008

financial crisis has been the top serious international

economic crisis by far, but the negative effects of

the epidemic have clarified the vulnerability of

economic openness in both developed and emerging

nations, [23], [24], [25], [26], [27].

The resulting shift in the socio-economic

landscape involving factors like inflation and

pandemics have led to the downfall and plummeting

of stock market business, as a result of which

increasing performance gap has arose, [26], [27],

[28], [29]. In particular, the economic development

of Jordan pro and post-pandemic was and continues

to be affected, [30], [31]. Brought on by incessant

lockdowns and systematic curfew, major business

sectors have ended up being closed and customers

demand for products and services decreased brought

on by the limitations in movements and the halt in

business operations, [17], [32].

In this background, stock prices are major

indicators of a successful business and return on

investment and the capital market is vulnerable to

unexpected conditions that disturb the perceptions

of the investors and affect the stock prices, [33],

[34], [35]. This is indicative of the fact that stock

price movement stems from variables that are based

on the market and firm conditions. According to

financial and behavioral finance theories on the

capital markets, stock price movement is a

consequence of markets and firm-based factors,

[36], [37], [38]. Any economic or environmental

occurrence influences investor perception,

impacting stock prices. According to [39], investor

positiveness decreases return volatility, but

glumness raises profits volatility. Also, there

remains a gap in the literature dedicated to assessing

the Covid-19 effects on the stock market at the

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Abdalwali Lutfi, Nashat Ali Almasria,

Hassan H Aldboush, Mohammed Faisal Hassan,

Mahmaod Alrawad, Fadya Burhan Alhajahmad

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corporate and industry level, which the pandemic

has wrought significant damage [2], [40], [41].

In December 2019, cases of a viral illness were

reported in China. In January 2020, as the number

of confirmed cases increased, the World Health

Organization (WHO) declared the virus outbreak a

"Public Health Emergency of International

Concern." On February 11, the illness caused by the

coronavirus was officially named COVID-19, [42],

[43]. On March 11, 2020, the global spread of the

coronavirus was declared by the WHO, [44],

making the COVID-19 virus a global health

challenge affecting more than 170 countries

worldwide. With many countries implementing

strict quarantine measures, economic activities were

significantly impacted. Risks associated with this

pandemic emerged from border closures, halted air

travel, mass unemployment, and disruptions in

supply chains, affecting numerous businesses,

companies, and industries, [45], [46]. COVID-19,

which began in December 2019, has infected over

10,000,000 (ten million) individuals and caused

more than 590,000 cases of deaths globally. Early

estimates placed the global economic cost of the

pandemic at around over 8.9 trillion dollars.

In the twenty-first century, numerous diseases

and epidemics, including bird flu (H1N1) and

MERS, until the Coronavirus emerged in 2020,

causing a global pandemic with numerous economic

and financial implications. According to [47],

illnesses can harm people of all social and economic

classes in any civilization if they proliferate in

developing nations due to congestion, inadequate

public health, and encounters with wild animals.

Therefore, more investments in public health and

growthis required in wealthy and impoverished

countries, given politicians’ contempt for scientific

truths about the importance of public health in

enhancing the quality of life and as a driver of

economic progress.

The last year was extraordinary in terms of the

COVID-19 impact on all aspects of life, either

economic or health issues, [48]. Thus, the pandemic

has socio-economic effects circulating dramatically.

The COVID-19 outbreak has already resulted in

enormous human suffering and economic distress.

Supply chains worldwide and travel and commodity

markets are all impacted. In other economies, the

consequences of successive outbreaks are similar,

[49].

The impacts of the pandemic are increasingly

evident as the number of cases continues to climb.

With governments implementing stricter health

protection measures, the rising number of cases

leads to extended periods of disruption for

numerous social and economic activities. The

impact of the epidemic can be gauged by the

growing number of confirmed cases, surpassing 120

million as of March 17, 2021, according to the

WHO, [50]. The declaration of the Covid-19 as a

pandemic along with the related government

regulations measures and induced packages in the

form of financial assistance and cutbacks of interest

rates, have the likelihood to direct stock markets in

various sectors in a confusing trend for months,

[51], [52]. Scholars from all over the globe have

documented the dynamic developments, as a result

of which, studies on the effects of Covid-19

epidemic on the global financial markets have been

published currently.

As a consequence of COVID-19 and related

effects, businesses have had to close with thousands

of employees laid off, resulting in heightened

unemployment rates and unstable financial status for

all, [23]. This urged the governments to implement

different assistance measures in the form of stimulus

packages and assistance initiatives to minimize the

negative effects, [53], [54], [55]. Additionally, due

to the pandemic, several economic and social

inequalities came to light, beginning with the

challenges that marginalized communities face in

obtaining education, healthcare, and required

services for daily lives. Along with these are the

psychological and emotional stress on the

individuals that manifested in the form of anxiety,

stress, and feelings of isolation. Regardless of the

above issues, communities remain resilient,

adaptable, and supportive of one another promoting

a united front in the face of challenges, [56].

This study deals with the effects of the

pandemic in different economic sectors such as

health, banking, education, retail, IT, real estate, and

the hospitality industry, [57], indicating that the

effects of the COVID-19 pandemic has been

experienced across the board. Owing to such effects,

the financial markets also suffer in the form of

declined economic activity, [58] and the value of

businesses, [59], [60]. The pandemic’s impact on

the economy has also been documented in the

indirect impact on the stock market. While the

impact varied by industry, the pandemic influenced

stock prices and market volatility, [61], [62], [63].

As a result, this study looks at the financial

ramifications of the Coronavirus spreading across

Jordan’s stock exchange sectors.

It, on the other hand, provided the opportunity

for the advancement of high-tech areas. The

outbreak positively impacted the information

technology, education, and healthcare industries.

The following are some of how our research adds to

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Abdalwali Lutfi, Nashat Ali Almasria,

Hassan H Aldboush, Mohammed Faisal Hassan,

Mahmaod Alrawad, Fadya Burhan Alhajahmad

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the literature. First, the epidemic’s impact on stock

prices in various subsectors is investigated, as well

as the response of each industry to the epidemic.

Second, our work is the first to use the event study

technique to investigate COVID-19 impacts at the

industrial level. As a result, this research contributes

by enriching the body of knowledge on COVID-19

and its effects on several parts of the economic and

financial system. This research contributes from the

standpoint of stock market response. The epidemic’s

impact may then be assessed based on the total

number of proven cases, which was at more than

119 million as of March 17, 2021. A vaccination or

prospective cure is a long-term effort that might take

years to complete. As a result, the influence will last

a long time. The current coronavirus disease

endemic has caused dramatic shifts in the macro

environment and market behavior, forcing most

businesses to reconfigure their business models to

adapt to the changes quickly.

The coronavirus disease outbreak and its

economic effects increased the need for full-quality

financial information among investors and other

decision-makers more than ever. Regulatory bodies

provide direct guidance and support on the needs for

planning financial and accounting findings that must

be taken into account for the influence of the

(COVID-19) flu epidemic. Government agencies

and researchers gather crucial evidence-based data

through extensive statistical surveys for establishing

policies. However, there is insufficient analysis to

understand the structure of the stock market industry

and the management status of businesses in these

sectors. Furthermore, there are limitations in

comparing the financial performance of Jordanian-

listed companies during and after covid-19

pandemic, [64], [65]. Government agencies and

research organizations gather crucial evidence-based

data through extensive statistical surveys for

establishing policies. However, there is insufficient

analysis to understand the structure of the ocean and

fisheries industry and the management status of

businesses in this sector. Furthermore, there are

limitations in selecting policy subjects and

implementing policies based on statistical data. Top

of Form.

2 Jordanian Financial Sector

Reaction to COVID-19 and Long-

Term Effects

After the trading closure on the Amman Stock

Exchange in 2020, as a response to the Covid-19

pandemic, the government of Jordan had to impose

economic and physical restrictions on businesses,

[6], [17], [66], [67]. On a global scale, the direct and

destructive economic impact of Covid-19 is evident,

and this holds true for Jordan, which regardless of

having a robust stock exchange sector has been

negatively affected by the pandemic because of lack

of natural resources and large dependence on

imports, [17], [68]. Consequently, firms have been

forced to address the crisis effects in order to sustain

their activities. Based on the Jordanian Strategy

Forum, while the pandemic impacted every business

regardless of their sizes, small businesses that

employed ten or fewer employees (67%), bore most

of the brunt, with over half of the investors in the

Jordanian enterprises requiring a year or several

years of recovery, [69]. This was supported by the

findings of a 2021 report made by the International

Labor Organization, the United Nations

Development Program, and the Favo Institute for

and Social Studies, which revealed that small-micro

enterprises have bore the brunt of the pandemic,

with around 55% micro-companies and 44% small

companies having to halt paying their employees,

while 33% of medium firms and 23% of large-sized

ones continuing to do so, [69]. As for their financial

resources, the surveyed enterprises indicated that

21% of them used commercial loans as their main

financial source, 3.4% made use of equity financing,

while 0.4% made use of non-bank financial

institution products. The report’s highlight on the

financial responsibilities for small and medium-

sized business indicated that the former category

(44%) fell short of meeting outstanding bills

compared to the latter category (34%). On a positive

note, 57% of businesses turned to using online

activity to the maximum, while 33% established

remote work trends for their workers, [70]. During

the pandemic time, the government of Jordan

established procedures and actions to be taken by

banks in light of the directions set out by the World

Bank that majority of nations adhered to – this was

the same for the central bank that reported major

measures and actions for public firms to basically

contribute to recouping losses and to adapting to the

pandemic influence in all economic areas. However,

despite all the developments and explanations, the

effect of the epidemic remains clear in every

economic and business area, with some still

suffering worse than others, [17].

The unique coronavirus outbreak and its

consequences have caused significant concern.

Concerns about COVID-19’s quick and recursive

spread across the globe, as well as the devastating

economic and financial effects of this unexpected

health crisis, have prompted a steadily growing

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number of studies on COVID-19’s impact on stock

industries in many of the affected areas in the US,

Europe, Asia, and Africa. This study intends to

contribute to the increasing literature by

concentrating on stock markets in GCC countries.

The number of those who have been confirmed

killed is rising, [71]. These statistics are projected to

soar when indirect expenditures such as lost

comorbidities and productivity are included. As a

result, the economic ramifications impact not just

public health systems but also economics and

business, as well as various market types and retail

chains, [49].

The pandemic declared in March 2020 by the

WHO has had far-reaching effects on global society

[44]. Different sectors have reverberated with the

effects of Covid-19 including healthcare, social life,

economy, and governments, [72]. Limitations in

gatherings as a result of the need to physically

distance themselves from each other have led to the

transformation of social interactions and strained

healthcare services, overwhelmed by the pressure

and the limited resources. In other words, the global

economy has experienced shocks leading to the

closures of businesses and the losses of numerous

job positions. Governments have been laid

transparent leaving their decision-making and

policies under scrutiny. The pandemic has also

exacerbated existing inequalities, affecting

marginalized communities disproportionately.

Efforts to mitigate the impact continue, showcasing

resilience in the face of adversity.

The virus, which rapidly spread across the

globe, was officially recognized as a pandemic by

the World Health Organization in March 20r.20.

This designation marked a significant turning point

in the global response to the virus, indicating the

urgency and severity of the situation. The effects of

the pandemic can be observed in virtually all sectors

of human existence. Social life has been greatly

impacted, with restrictions on gatherings, physical

distancing measures, and changes in interpersonal

interactions becoming the new norm.

Furthermore, the pandemic reshaped the way

people work, learn, and socialize to a tremendous

extent. The necessity to adapt to the remote model

of work and the transition to virtual meetings

characterized modern reality. The pandemic caused

the reconfiguration of traditional patterns of work,

contributing to an accelerated pace of digitization in

numerous fields. In the educational sector, most

institutions switched to online learning, which posed

multiple challenges and opportunities to students

and educators.

The first preventive government measures were

initiated on February 23, with Jordan's authorities

tightening control and preventive measures at all

border crossings. The first confirmed case of

COVID-19 in Jordan was reported on March 2,

2020. By 17th March, the number of verified cases

reached forty, [73]. This led the government in

Jordan to take further precautionary measures,

together with the activation of the Defense Law

issued in 1992, suspending all public and private

institutions and administrations except vital sectors

and the health sector. It also restricted citizens from

leaving their homes excluding the cases of extreme

necessity. Gatherings of more than 10 people were

prohibited, as was inter-governmental travel.

Literature on the influence of COVID-19

(coronavirus) on stock market movements during

the pandemic may appear random or irrational, but

upon closer examination, it becomes clear that

financial markets did not react blindly, [74]. The

following Table 1 illustrates the changes that

occurred in the Amman Stock Exchange (ASE)

during the year 2020, [75].

Table 1. Changes that occurred in the Amman Stock

Exchange (ASE) during the year 2020

2020

2019

2020

1 billion Jordanian

Dinars

1.6 billion

Jordanian

Dinars

Trading Volume

1.1 billion shares

1.2 billion

Traded Stocks

421 thousand

contracts

503 thousand

contracts

Executed

Contracts

1657.2 points

1815.2 points

ASE100 General

Price Index

12.9 billion

Jordanian Dinars

14.55 billion

Jordanian

Dinars

Market

Capitalization of

Listed Stocks

96.9 million

Jordanian Dinars

164.4 million

Jordanian

Dinars

Foreign

Investments

In emerging stock markets, a study by [62],

reveals that the responses of these markets were

robust during the primary emergence of the

pandemic, while a study by [76] indicates

significant short and medium-term impacts of

market volatility resulting from the pandemic. The

present work aims to empirically examine the

influence of the coronavirus (COVID-19) on the

emerging stock market.

3 Related Literature

This part aims to present some of the previous

research that has been done on the subject. It starts

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with works on the global financial crisis, including

an illustration of the stock market’s reaction. It also

includes some latest publications on the economic

and industry implications of the pandemic, [76],

[77], [78]. The global financial crisis has been

examined from several angles. The “global financial

crisis,” according to [79], is linked to the efficient

market hypothesis. Despite the theory’s undeniable

flaws, the notion that it is to blame for the current

global crisis appears to be overblown, [80]. Whether

market efficiency is to blame for an asset bubble,

investing professionals are miscalculating risks, and

regulators worldwide fall asleep at the wheel. Other

allegations include the failure of Lehman Brothers

and other significant financial companies

demonstrating market inefficiencies and that a well-

functioning market would have forecast the

catastrophe. He refutes these arguments and

explores the evidence of pervasive abnormalities

and the emergence of behavioral finance, [81], [82].

In the pandemic period, the economies all over the

world have experienced their worst performance,

[83], [84], as evidenced by the increasing number of

studies in the past few years. Regardless of the bulk

of literature dedicated to the topic, only a few

studies have focused on the effect of the pandemic

on developing countries, which are still struggling to

stay on their feet following the pandemic. On the

whole, the current pandemic has had the worst

effects on economies compared to previous

pandemics and not even the financial crisis of 2008-

2009 can compare. In a short period, it had resulted

in higher uncertainty due to which the assessment of

its impact on the economy and the recession

challenge remains ongoing, [49]. The resulting

recession was brought on by the challenges and

restrictions due to the pandemic on social lives and

presently, only a few methods have been proposed

to evaluate the influence of the corona pandemic on

the growth of the economy, industry and businesses,

[85].

Owing to the current dynamic changes in the

financial markets on a global scale, studies have

largely analyzed the Covid-19 long-term effects,

specifically on the risks in the countries and on their

investment returns; countries like the U.S., China,

and the U.K. were the subject of such analysis,

where studies adopted scientific observations, [27],

[46], [85], [86], [87]. In particular, in the U.S.

context, [87] looked into the way COVID-19

impacted stock returns through the effects on

previous asset prices. The findings of this study and

related findings supported an enormous and long-

term negative effect of the pandemic on the world

economy owing to it being a health catastrophe,

[88]. Nevertheless, based on industry-level, studies

found the minimal effects of the pandemic on stock

prices, with its economic level being limited to

some industries more than others, [77]. Other

related studies like [27], looked into the Covid-19

pandemic effect on financial securities and

conducted a comparison between those of China and

other countries, but largely stayed away from the

diversity of the sectors. Also, in [89], the authors

examined the epidemic’s effects on financial

markets.

Because COVID-19 has had a severe impact on

economies throughout the world, but possibly most

notably in emerging economies. In addition,

COVID-19 has forced governments throughout the

world to choose between saving lives and

strengthening the healthcare system’s ability to deal

with the epidemic, or funding initiatives to reduce

the costs of social isolation and company closures.

However, it is crucial to note that implementing

such policies in a developing economy is

substantially more difficult, [90]. In addition, these

countries face various obstacles that make it

difficult to take the essential steps. Noticing the

potential economic impacts of epidemics when

COVID-19 occurred, several recent academic

studies attempted to investigate the impact of this

disease outbreak on stock market performance in

various countries using various econometric

methods. [91], use a panel regression technique

using different configurations: the daily increase in

total reported cases and the daily increase in

fatalities. According to the research, these indicators

significantly negatively affect stock returns

throughout the Hang Seng Index. After accounting

for country characteristics and systemic risk owing

to global variables, [51], conducts a panel data

analysis to investigate the impact of an increase in

COVID-19 confirmed cases and fatalities on stock

market returns. [51], considered the influence of the

COVID-19 pandemic on the stock market

performance of 64 nations. According to [54],

COVID-19 significantly influenced the financial

industry (including banks and financial institutions).

However, little study has been done on the

economies showing indications of recovery.

Not all flows were in the opposing direction of

the economic cycle during the global financial crisis

of 2008-2010. The World Bank, notably the African

Development Bank, and development banks,

particularly those that assist public-sector initiatives,

were anti-cyclical. European development finance

institutions (EDFIs), however, were insufficient.

The European Union’s and the Organization for

Economic Cooperation and Development’s overall

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support in 2009 and 2010 did not run as opposed to

the economic cycle, [92].

The World Bank Group and the International

Monetary Funds are collaborating to solve the

present coronavirus crisis by tackling the outbreak

and its health consequences and supporting

financially damaged countries, [77]. A two-year

pause is recommended to establish immediate fiscal

space to deal with healthcare emergencies. They are

returning to the state of the continent before

COVID-19 in order to ensure a strong recovery,

[93]. [47], offered some initial cost approximations

for COVID-19 according to seven scenarios for how

the disease could evolve. Rather than being

particular about the virus pandemic, the goal is to

offer data on a variety of probable financial

implications associated with it. [94], investigated

how the COVID -19 spread influenced financial

markets. The researcher tested the program in the

six worst countries (based on the number of

cumulative incidents). As a result, it has been

determined that Stock Market returns (SMR) are

more sensitive to COVID -19 cases than deaths.

Furthermore, the COVID -19 spread has a negative

impact on SMR in China, Germany, France, and

Spain, according to the durability check.

The financial market's reaction to this pandemic

concerning Coronavirus transmission will be

investigated by [51]. This study used daily COVID-

19 confirmed cases, deaths, and SMR data from 64

countries. The study indicates that the stock market

has reacted negatively to the increase in COVID-19

confirmed cases. The findings reveal that an

increase in the number of confirmed diseases causes

stock markets to react faster than an increase in

deaths. According to the findings, adverse market

reactions were also significant during the early days

of verified cases and between 40-60 days after the

initial confirmed cases.

Indubitably, the COVID-19 pandemic has

wrought destruction and harm to the majority of

listed firms and stock markets, leaving the latter to

enter a bear market, [95]. Added to this, the global

market capitalization has been evidenced to have

shrunk by 30%, with notable tremendous volatility

and uncertainty in the global financial markets

throughout March 2020. In the U.S., the stock

market plummeted to its lowest level since 1987

because of the pandemic, and in India and China,

low economies ensued following the great shock

major economies showed reduced rates of interest in

their central banks to attract investors but did not

succeed in their quest, [96]. Hospitality firms were

impacted resulting in the selling off of stocks and

significant dips in indices were documented. In this

regard, the World Bank took a step to assist

countries by pledging $14 billion for assistance,

[85], providing financial assistance to member

countries for the enhancement of health services and

better infrastructure, along with investments in

timely discovering details about the virus, [70].

[97], looks at the effect of COVID-19 instances

and deaths on the stock markets in the US, taking

into account variations in the trading amount and

volatility expectations. Based on the GARCH 1

model, the findings imply that the COVID-19 issue

has substantially influenced the number of cases and

deaths in the United States and six other nations.

Along the same study, [61], dedicated their

work to the COVID-19 pandemic effect on Egypt’s

Exchange Sectoral Indices. The spread of the virus

was documented using Coronavirus cases and

deaths, with the population of the country gauged by

each case and new death. The study’s dependent

variable gauged the returns of daily sectoral

indicators for the stock market, and it indicates the

indicators’ response to the Coronavirus spread.

Beginning from March 1, 2020, to May 10, 2020,

this was daily noted and the findings showed that

SMR tended to be sensitive to cumulative mortality

indicators compared to daily Coronavirus deaths. In

this regard, the pandemic increases the risk of

losses, after which the management is urged to

support financial reserves for emergencies, also,

increasing cash retention was found to lead to the

depletion of investment funds, which decreases the

long-term growth of the firm.

[98], use panel data analysis to explore the

influence of the coronavirus outbreak on stock

markets; the results show that the banking sector,

the food, beverage, and tobacco sector sectors, and

the healthcare and pharmaceutical sectors all have

significant negative industrial impacts.

Furthermore, the results show that different

segments, such as the IT sectors, the

Communications and Media Services sectors, the

Transportation and Shipping Services sector, and

trade, all significantly positively impact the

industry.

In [99] study, the stock market’s performance

was the focus in light of the pandemic’s influence

on it in the case of Vietnam. The authors adopted a

random-effect model with panel data obtained from

733 listed businesses of stock returns on HOSE and

Hanoi Stock Exchange (HNX) for the period from

2nd January to 13th December 2020. Based on the

obtained findings, the Covid-19 daily cases in the

country have had a negative effect on the market’s

returns, [99]. It was noted that the pre-lockdown and

second-wave effects were higher in severity

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compared to the lockdown period impact, based on

industry. It was also notable that the most impacted

was the financial sector, with adverse shocks

absorbed, as a result of which, the real sector was

affected owing to interventions from the

government, [100]. The stock market movements

during the pandemic were a reflection of the

expected outcome.

The response to the COVID-19 pandemic

spread should be more detailed, as company

performance appears to be sympathetic to social

isolation due to the COVID-19 pandemic spread,

[101]. [102], discuss the following three features

that are unique to the pandemic: a) significant

variations in pandemic influence across industries

sectors. B) a government intervention level and

economic backing for the industry that has never

been seen before. C) Due to serial lockdowns, there

is a significant expectation uncertainty about the

repercussions of the longer-term real sector.

It is critical to identify the various repercussions

of a policy of lockdowns that are destructive in

numerous industries, such as restaurants, culture,

and tourism while pushing the business model up in

other areas. Industries that gain from COVID-19

include communication, e-commerce, IT in general,

and pharmaceuticals.

As a result, Covid-19 has increased the number

of sector failures, posing a danger to the banking

sector due to an increase in non-performing loans,

[103]. To help struggling businesses, governments

implemented a range of preventative measures and

fiscal policies, including tax deferrals, government-

guaranteed loans, direct cash transfers, and equity-

like injections. [104], stated that the Covid-19

epidemic has an impact on business activity, which

could damage the banking sector. The COVID-19

outbreak, according to [105], has two implications

for the stock market. First, the substantial amount of

political, and economic risk induced by the

pandemic’s spreading characteristics and the

ambiguous future stance around COVID-19 resulted

in poor cash flow estimates, leading to stock market

depreciation.

There is a limited investigation of the effect of

COVID-19 on SMR in the existing studies. Thus,

compared with the literature, the research

determines the reaction and response of the main

Jordanian stock exchange sectors to the coronavirus

pandemic, the current research deals with indicators

of new cases and deaths of infections. Furthermore,

the spread of the Coronavirus has been measured

relative to the Jordanian population, with all

measures adjusted per million. According to a

review of the relevant literature such as by [51],

[94], [106] and [107] based on the purpose of the

study which is to examine the impact of COVID-19

pandemic (Coronavirus case and death from the

Coronavirus) on the Jordanian SMR (Banking

Sector Index; Industry Sector Index; Insurance

Sector Index; and Service Sector Index).

4 Hypotheses Formulation

The coronavirus pandemic has brought about a

unique crisis, characterized by its global health

impact and the resulting closure of various sectors,

including financial markets. Unlike previous crises,

the current situation highlights a conflict between

prioritizing public health and mitigating economic

consequences, [44]. In this case, monetary policies

and financial indicators aim to minimize the

pandemic's intensity and its economic effects, while

the ultimate solution lies in the development and

distribution of vaccines. Governments worldwide

are compelled to implement strategies for reopening

markets and other affected sectors while managing

emergencies. Stock market returns reflect the profits

or losses derived from invested capital, and they

play a crucial role in evaluating equity investments,

[108]. Various factors, such as financial

performance, capital requirements, and ownership,

influence stock returns. Stock markets hold

significant importance in global economies, serving

as platforms for project evaluation, financing, and

promoting sustainable development. Scholars have

emphasized the efficiency of stock markets in

generating abnormal returns when adjusted for risk,

reinforcing their role in investment strategies. The

Coronavirus pandemic has had no significant effect

on Jordanian SMR (Banking; Insurance; Industry,

and Service Sector Index). Therefore, it was divided

into two sub-hypotheses:

H1: COVID-19 deaths have a significant influence

on the Jordanian SMR consisting of Banking,

Insurance, Industry and Service Sector Index.

H2: There are significant differences during and

post-COVID-19 Crisis in the Jordanian SMR

consisting of the Banking, Insurance, Industry, and

Service Sector Index.

5 Methodology and Data

For empirical investigation purposes, there are three

main types of data; panel, cross-sectional, and time

series, [109]. A panel data set involves cross-

sectional and over-time series data, [110]. For this

secondary study, data was collected from the

Amman Stock Exchange which was used to

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Mahmaod Alrawad, Fadya Burhan Alhajahmad

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measure the study’s variables as it is considered

reliable. Thus, this source is more precise and

truthful than other secondary data sources, [111],

[112]. This part consists of the variety of features of

the empirical investigation to find out the actual

application of the effects of COVID-19 on the

Jordan Stock Exchange sectors’ performance in

practical reality by explaining the sample and then

analyzing this data using a set of suitable statistical

analyses. This was done using the Values of the

sectoral indicators of the Jordanian stock market,

which are represented by four indicators of the main

sectors and cover the interval from 2020 to 2022;

daily, at a rate of (512) trading days for the

Jordanian Stock Exchange. The Coronavirus

pandemic throughout the research period is depicted

in Figure 1 and Figure 2:

The current research is based on the action

study methodology, where the spread of the

Coronavirus is a specific action that started at a

specific time, and the data for the SMR are collected

during and after this action, and a set of statistical

tests are performed to compare the financial

performance during and after the spread of this

event.

This study concentrated on the spread of Covid-

19 as an action. Data were collected during this

action for the years 2020 and 2021 and after for the

years 2021 and 2022. Thus, the study period covers

two years.

This research aims to measure the influence of

the Coronavirus spread on the financial performance

of the capital markets sectors, and the financial

performance of companies can be measured through

a set of financial indicators, the most important of

which are ROI, ROA, Growth, which represent

measures of financial performance The influence of

the Coronavirus spread on financial performance

can be measured through the three financial

indicators, and accordingly, the research model can

be formulated as follows:

FP = α + β1 ROIit+ β2 ROAit+ β3 Growthit+ ε

Where:

FP: Financial Performance

α: Constant

β1, β2, β3 : Model Co-efficient

ROIit: Return on Investment at Sector I in Period T

ROAit: Return on Assets at Sector I in Period T

Growthit: Growth Ratio at Sector I in Period T

ε : Error Term

ASE’s performance was also influenced. The

total trading volume decreased from JD 668 million

in 2019 to JD 416 million in the same period.

Daily, the spread of the Coronavirus was

measured in terms of ‘coronavirus cases’ and

‘coronavirus deaths.’ The dependent variable

depicts the reaction of Jordan’s sectoral indicators,

represented by the Banking Sector, Industry Sector,

Insurance Sector, and Service Sector Indexes. The

Jordanian stock market’s daily sectoral indicators

are used to track the spread of the Coronavirus.

6 Data Analysis and Results

This section discusses the statistical analysis of the

research data, where the descriptive statistical

analysis of the data is performed, and then the

inferential statistical analysis is performed to test the

hypotheses. This section can be arranged as follows:

6.1 Descriptive Statistics

The descriptive statistical analysis was conducted

clarifying the general trend of the research data

through the mean and standard deviation tests. The

results of the descriptive statistics are presented in

Table 2.

Table 2. Search Variables (Descriptive Statistics)

Source: Descriptive statistics output using SPSS v.26

From Table 2 we can show that:

- The number of observations of the sample

sectors was 44, where there are 11 sectors for

each sector of 4 years.

- The mean previous closing price of the shares of

the companies of the research sample sectors

2.522, at a std deviation of 1.841.

- The mean high price of the shares of the

companies of the research sample sectors 3.066,

at a std deviation of 3.030.

During

After

Growth

ROA

ROI

Growth

ROA

ROI

-.81

-.31

-.26

-.79

-.23

-.80

-.28

-.25

-.44

-.20

-.19

-.68

-.22

-.21

-.37

-.20

-.18

-.37

-.18

-.17

-.22

-.12

-.11

-.34

-.17

-.15

-.19

-.12

-.11

-.31

-.16

-.15

-.19

-.11

-.10

-.28

-.15

-.13

-.15

-.09

-.08

-.26

-.13

-.12

.02

-.25

-.13

-.12

.03

-.16

-.11

-.10

.04

.03

-.13

-.09

-.08

.06

.04

-.12

-.08

.08

.04

-.11

-.07

.10

.04

-.08

-.03

.10

.06

.07

-.04

-.02

.11

.07

.01

.00

.14

.07

.10

.05

.17

.07

.08

.15

.07

.18

.09

.18

.08

.32

.17

.18

.21

.12

.62

.18

.20

.32

.16

.18

1.25

.26

.34

.66

.18

.21

6.50

.46

.71

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- The mean low price of the shares of the

companies of the research sample sectors 2.176,

at a std deviation of 1.617.

- The mean closing price of the shares of the

companies of the research sample sectors 2.618,

at a std deviation of 2.546.

- The mean of ROI of the companies of the

research sample sectors 0.0046, at a std

deviation of 0.175.

- The mean of ROA of the companies of the

research sample sectors 0.0204, at a std

deviation of 0.154.

- The mean of growth of the companies of the

research sample sectors 0.096, at a std deviation

of 0.1058.

Descriptive statistics can be displayed by

displaying the average of financial indicators during

and after the spread of coronavirus, with the rise in

prevalence rates, so that the financial performance

during and after COVID-19 can be compared

through the following Table 3:

Table 3. Descriptive Statistics during/after COVID-

Source: Descriptive statistics output using SPSS v.26

Fig. 1: Total COVID-19 Cases in Jordan

Fig. 2: Total COVID-19 Deathsin Jordan

6.2 Testing Hypothesis and Results

To test the main Hypothesis, it was divided into two

sub hypotheses; the proposed empirical approach

involves the estimate of the following Ordinary

Least Squares (OLS) regression equations:

H1: There is a significant influence of New COVID-

19 Deaths on Jordanian SMR (Banking; Insurance;

Industry, and Service Sector Index).

H2: there are significant differences in Jordanian

SMR (Banking; Insurance; Industry, and Service

Sector Index) during and after COVID-19 Crisis.

To test the first hypothesis, we can do t test and

regression test as follow:

- T -test

The Independent-Samples T Test procedure is

designed to compare means between two groups of

cases. In an ideal scenario, these groups should be

randomly assigned, ensuring that any observed

differences in responses result from the treatment

(or the absence of treatment) and not from other

variables. However, this ideal setup doesn't apply

when comparing the average income between both

male and female groups since an individual's gender

is assigned randomly. In such cases, it's crucial to

account for other factors that may be influencing the

observed differences in means. For instance,

variations in average income can be affected by

factors like education, rather than gender alone. In

the equal-variance t-test, the observations must

represent independent, random samples from normal

distributions with the same population variance. In

the case of the unequal-variance t-test, the

observations should still be independent, random

samples from normal distributions. It's worth noting

that the two-sample t-test is relatively robust even

when the data deviates from perfect normality.

When assessing distributions graphically, focus on

their symmetry and check for the absence of

outliers.

From Table 4 we can show that:

- There is a significant difference between the

ROI values during and after the spread of

COVID-19, and these differences are

Mean

Std. Deviation

Valid

Year

2019

1.13096

B/A

1.5000

.50578

Sector

6.0000

3.19884

Previous year

2.5220

1.84172

High price

3.0668

3.03021

Low price

2.1761

1.61748

Closing price

2.6184

2.54673

ROI

-.0046

.17521

GROWTH

.0965

1.05819

ROA

-.0204

.15460

Avg price

2.6071

2.33592

Value traded

9623128.4

752

18619179.57177

No of shares

4665387.0

386

8163199.50043

No of trans

3705.0763

6935.07550

Turnover ratio

22.2517

65.84982

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statistically significant, as the P value is less

than 5%.

- There is a significant difference between the

growth values during and after the spread of

COVID-19, and these differences are

statistically significant, as the P value is less

than 5%.

- There is a significant difference between the

ROA values during and after the spread of

Covid-19, and these differences are statistically

significant, as the P value is less than 5%.

- Regression Test

To assess the hypothesis validity, a test of

regression was run on the Jordanian Stock Exchange

sectors to determine the influence of changes in the

independent factors of the Coronavirus spread on

the values of the index returns using the ordinary

least squares method.

From Table 5 we can show that:

- There is a significant impact of corona virus on

ROI values during and after the spread of

COVID-19, where R= 0.228, and this effect is

statistically significant, as the P value is less

than 5%.

We can see the results of the regression test for

growth values in Table 6 where there is a significant

effect of COVID-19 on growth values during and

after the spread of COVID-19, where R= 0.303, and

this effect is statistically significant, as the P value is

less than 5%.

The results of the regression test for ROA values

can be seen in Table 7 where:

- There is a significant effect of Covid-19 on

ROA values during and after the spread of

COVID-19, where R= 0.294, and this effect is

statistically significant, as the P value is less

than 5%.

- Compare Coefficients B/A Covid-19

We can do the regression test to compare financial

performance during with after as follows in Table 8:

- There is a significant impact of Covid-19 on the

ROI coefficient during and after the spread of

COVID-19, where all coefficients has been

changed and all P value is less than 5%.

- There is a significant impact for Covid-19 on

ROA coefficient during and after the spread of

Covid-19, where all coefficient has been

changed and all P value is less than 5%.

- There is a significant impact of Covid-19 on the

Growth coefficient during and after the spread

of COVID-19, where all coefficients has been

changed and all P value is less than 5%.

Table 4. Independent Samples Test

Table 5. regression results Effect of New Coronavirus on ROI

Model

Unstandardized

Coefficients

Standardized Coefficients

Sig.

Collinearity Statistics

Std. Error

Beta

Tolerance

VIF

(Constant)

-.618

.497

-1.243

.221

.476

.314

.228

1.515

.137

1.000

Model

.228

R 2

.052

Adjusted R 2

.029

Estimate Std. Error

1.04259

Change Statistics

R 2 Changes

.052

F Change

2.296

df1

df2

Sig. F Changes

.014

Durbin-Watson

.706

t-test for Equality of Means

Std. Error Difference

Mean Difference

Sig. (2-tailed)

.31435

-.47636

.037

-1.515

Equal variances assumed

ROI

.31435

-.47636

.014

23.527

-1.515

Equal variances not assumed

.04483

-.09227

.046

-2.058

Equal variances assumed

Growth

.04483

-.09227

.046

40.866

-2.058

Equal variances not assumed

.05102

-.10182

.025

-1.996

Equal variances assumed

ROA

.05102

-.10182

.036

36.121

-1.996

Equal variances not assumed

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Table 6. regression results Effect of New Coronavirus on growth

Model

Unstandardized Coefficients

Standardized

Coefficients

Sig.

Collinearity Statistics

Std. Error

Beta

Tolerance

VIF

(Constant)

-.159

.071

-2.245

.030

.092

.045

.303

2.058

.046

1.000

Model

.303a

R 2

.092

Adjusted R 2

.070

Estimate Std. Error

.14868

Change Statistics

R 2 Changes

.092

F Changes

4.237

df1

df2

Sig. F Changes

.046

Durbin-Watson

.369

Table 7. Regression results effect of New Coronavirus on ROA

Model

Unstandardized Coefficients

Standardized

Coefficients

Sig.

Collinearity Statistics

Std. Error

Beta

Tolerance

VIF

(Constant)

-.158

.081

-1.955

.057

.102

.051

.294

1.996

.052

1.000

Model

.294

R 2

.087

Adjusted R 2

.065

Estimate Std. Error

.16922

Change Statistics

R 2 Changes

.087

F Changes

3.982

df1

df2

Sig. F Changes

.005

Durbin-Watson

.410

Table 8. Coefficient of financial performance during and after Covid-19

ROI

ROA

Growth

During

After

During

After

During

After

Sig.

(Constant)

.973

.007

.010

4.334

.008

-3.655

.008

1.453

.010

-1.28

.010

Year

.000

.007

.010

-.002

.008

.002

.008

-7.194

.010

-4.337

.010

Sector

.002

.009

.007

.000

.009

-.002

.007

5.421

.010

-1.000

.000

year close

.018

.006

.008

-.112

.042

-.017

.008

-1.000

.000

-6.713

.010

High price

-.010

.005

.008

-.007

.009

.006

.009

1.293

.010

-9.941

.010

Low price

-.106

.023

.025

.074

.019

.104

.023

-5.457

.010

1.000

.000

GROWTH

.040

.009

.032

.060

.049

-.030

.045

1.000

.000

5.583

.010

ROA

1.017

.000

5.884

.008

-.077

.008

-3.176

.010

2.857

.010

LEV

.083

.017

.006

-1.73

.008

-2.288

.008

-1.002

.010

-1.469

.010

REV

1.419

.018

.009

3.844

.009

-6.721

.008

4.618

.009

1.419

.010

Size

7.800

.008

.039

.000

.037

-1.795

.001

2.342

.010

No of trans

.000

.009

.017

.999

.000

.047

1.453

.010

6.378

.010

Turnover

ratio

.000

.005

.026

-.034

.010

.959

.000

-7.194

.006

6.743

.010

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7 Results and Discussion

The notable impact of Covid-19 on several financial

performance indicators has been well-documented,

with the Return on Investment (ROI) coefficient

having been significantly affected during and post-

pandemic, where changes in all observed

coefficients and p-values amounted to less than 5%.

During and post-pandemic, the Return on Assets

coefficient was also affected, with all coefficients

adjusted. Moreover, all of the p-values were no

more than 5% for the modified processes. The effect

of COVID-19 on growth coefficient was significant

on the three processes before, during, and after the

existence of the pandemic, with all the p-values not

more than 5% for the processes. Therefore, the

results showed the significant effect of the pandemic

on the financial performance of the processes based

on various performance indicators.

The rapid widespread of diseases had a huge

impact on the regression lines of various businesses-

based performance indicators performance

coefficients such as ROI, ROA, and growth. The

first rate of changes happened on the ROI

coefficient, which suffered huge differences pre-

and post-pandemic. It directly indicates how the

pandemic affected the firms’ profit-making and

producing effect. The changes in the coefficient

values are indicative of the business's attempt to

change its operational methods to survive through

the epidemic challenges. Further supporting the

statistical importance of the effects are the p-values

that were found to be smaller compared to the

traditional 5% cutoff.

In the same way, the ROA coefficient also had

notable changes during and following the pandemic

with changes in coefficient values being a testament

to the ability of the companies to turn a profit about

the total assets that have been affected. The changes

could stem from the effects of the pandemic on the

behavior of consumers, disruptions to the supply

chain, and the market dynamics changes. All the

matching p-values remained less than 5% which

supports significant effects.

Finally, the growth coefficient was not spared

by the impact, with the growth coefficient indicative

of the impact during and following the spread of the

coronavirus. The coefficient values changes reflect

the business's difficulty in maintaining and

enhancing their growth pace and based on the p-

values of the growth coefficient that were all lower

than 5%, the relevance of the effects was validated.

These results offer strong proof that Covid-19

has had a significant influence on financial

performance metrics. Businesses must modify and

reevaluate their strategy in response to the continual

problems presented by the pandemic, as indicated

by the changes in the coefficients and their

statistical significance. These findings have

ramifications that go beyond specific businesses

because they capture the larger economic

environment that COVID-19 has changed.

This study looked at the impact of corona virus

on Jordanian business performance utilizing

financial data from Jordanian companies that were

listed. The research sample consists of Banking

Sector Index; Industry Sector Index; Insurance

Sector Index and Service Sector Index for which

regular data are available through daily reports for

the study period, from 03/03/2020 till

30/9/2022.Thus, the current research attempts to

verify the impacts of the Coronavirus spread on

these four sectors of the Jordanian Stock Exchange.

The Corona pandemic was measured by new cases

and new deaths on a daily basis from 03/03/2020

until 30/9/2022. The increase of Corona cases is

measured relative to the population of Jordan, while

the stock exchange return is measured by indices of

the Jordanian stock exchange sectors. The findings

indicated that the stock markets sectors in Jordan

seem sensitive to the increase of the Coronavirus.

The number of daily confirmed cases of COVID-19

in Jordan has a positive impact on the returns of the

most affected industry sector, as it represents R2

(57.25%), then the banking sector (14.21%),

followed by the services sector (12,21%). On the

other hand, the results showed that the number of

daily COVID-19 cases in Jordan has a negative

influence on the returns of the insurance sector as it

represents R2 (63.69%). Therefore, for the first

Hypothesis, we can reject the null hypothesis and

accept the alternative, as the stock exchange return

seems more sensitive to new cases of infection with

the Coronavirus. In contrast, the new deaths from

the Coronavirus do not affect the sectors of the

Jordanian stocks exchange according to the second

hypothesis results.

[113], have observed that the COVID-19

epidemic led to the emergence of herding behavior

within the Indian stock market at the sector level.

Similarly, [114], have made claims regarding the

pandemic's influence on herding behavior at the

sector level in the stock markets of Taiwan and

Vietnam. Despite these challenges, the economies

within these stock markets exhibit signs of recovery.

The COVID-19 crisis has heightened potential

losses, prompting management to bolster their

financial reserves in preparation for emergencies.

While increased cash retention safeguards against

potential downturns, it can also hamper long-term

business growth by limiting available investment

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capital. Return predictability is further influenced by

specific industry characteristics. [115], emphasize

the substantial impact of the pandemic on the global

economy, highlighting that the prevention and

control of COVID-19 are currently at a critical

juncture. Consequently, the first and second quarters

of 2020 witnessed significant shifts in company

performance. In navigating the complexities of the

COVID-19 outbreak, investors should remain

vigilant about fluctuations in returns and prudently

manage the associated risks concerning their

financial assets.

According to traditional economic and financial

theory, stock prices are determined mainly by

market and business factors. The impact of the

pandemic on the global economy is substantial, and

prevention and control of the COVID-19 pandemic

are at a crucial stage. The first and second quarters

of 2020 have seen significant shifts in company

performance. During the COVID-19 outbreak,

investors should be aware of the changes in returns

and properly handle the risks associated with their

financial assets. The COVID-19 epidemic might

have far-reaching long-term consequences in the

period following the pandemic. The COVID-19

pandemic had varying effects on Jordanian market

industries during the pre-lockdown, lockdown, and

second-wave periods.

Given the unquestionable and adverse

consequences of the COVID-19 pandemic and the

continuing increase in the number of infected

individuals every day, nations and governments

must act swiftly to mitigate the spread of the virus

and pursue preventative measures. Indeed, it is

necessary to do so to prevent the stock markets from

incurring enormous losses in case of subsequent

pandemics and outbreaks. The lessons from the

COVID-19 crisis demonstrate the value of

preparedness, urgency, and successful containment

strategies in ensuring that the financial markets

remain robust and robust when confronted with

unforeseeable global health threats. It is for these

reasons that governments and international

organizations should consider a comprehensive and

proactive approach to developing and implementing

policies that will minimize the adverse impacts of

such crises on the stock markets and the economy at

large. Such an approach will further protect the

financial systems and promote stability across the

globe, reducing economic vulnerabilities.

Additionally, the empirical results of this study

demonstrate that the effects of COVID-19 differ

based on the industry. Variations usually affect

investor behavior and sentiment, which affects stock

prices as a result of events related to the capital

markets. Moreover, a 15% decline in global foreign

direct investment is predicted as a result of the

present disease outbreak. The impacts of COVID-19

are widespread, affecting many facets of life, and

are anticipated to have a lasting effect on the

economy. However, the effect size may vary from

country to country and from industry to sector.

Global stock markets have made significant

adjustments in response to the slowing economy.

One logical explanation for the responses is that

government restrictions on company activity and

travel have hurt the service sector, [116]. The results

show that Jordanian industries are greatly impacted

by the COVID-19 pandemic. COVID-19 is one of

the largest challenges facing the globe today.

8 Conclusion, Implications, and

Future Research

Numerous Literature have focused on the impact of

the COVID-19 pandemic on stock market

performance in emerging economies. The main

purpose of this research is to investigate the effect

of the Corona virus on the returns of Jordan Stock

Exchange sectors from 2020 to 2022. Therefore,

from the panel data framework (trading days for the

Jordanian Stock Exchange), the study employed

panel regressions techniques. This research finding

confirms that the number of new daily cases of

COVID-19 in Jordan had a positive influence on the

returns of the most affected industry sector, then the

banking sector, followed by the services sector.

However, it has an unsurprisingly negative impact

on the insurance sector. The return of the stock

exchange appears to be more sensitive to new cases

of infection with the Coronavirus. In contrast, the

new deaths from the Coronavirus do not affect the

sectors of the Jordanian Stock Exchange.

This research highlights important policy

implications for both investors and governments.

First, the results show that the insurance industry is

negatively impacted by the daily deaths and cases of

COVID-19. This means that to protect financial

markets from possible drops during upcoming

pandemics, governments should put in place

efficient control mechanisms and take early,

aggressive action. Second, keeping in mind both the

advantages and disadvantages of COVID-19

situations, investors ought to think about spreading

their portfolios throughout a range of industry

sectors. This can lessen the possibility of losses in

industries more susceptible to the epidemic. Third,

governments should concentrate on offering specific

assistance and measures to the industries, banks, and

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services sectors, that are most impacted by COVID-

19. This can involve offering financial support,

offering tax breaks, and enacting laws that

encourage recovery and resilience. Fourth,

governments should prioritize investments in

healthcare infrastructure, resources, and research to

effectively manage the pandemic, mitigate long-

term economic implications, and enable the

implementation of successful public health policies

in all of the countries—given the positive impact of

COVID-19 cases on the returns of the most affected

industry sector and the banking sector. Fifth,

governments and investors should improve their risk

management techniques and create backup plans

that take possible COVID-19 outbreaks or waves

into consideration. Making educated decisions and

reducing interruptions to the stock market and

impacted industries can both benefit from this.

Sixth, governments ought to think about integrating

the pandemic's lessons into their frameworks for

policy, with a focus on creating industry sectors that

are resilient and sustainable. This can entail

encouraging innovation and the digital

transformation of society, growing emergent

industries, and diversifying economies. The

Jordanian economy is suffering financially as a

result of the failure of a large number of

organizations; the financial defilement and collapse

of numerous organizations as a result of the

shortcomings and challenges of executives, [117],

[118]. Investors and governments may better

manage the pandemic's economic effects and work

toward a resilient and sustainable future by taking

these policy consequences into account, [119],

[120], [121].

Based on the same line of studies, the

uniqueness of this study lies in its investigation into

the way Covid-19 pandemic has influence ROI of

listed firms on the Jordan Stock Exchange,

especially following the pandemic. However, this

work is not without its limitations that can be useful

for future authors to take into consideration. The

first limitation is the limited context of the study,

which focuses solely on Jordan, and thus, the

findings may not be applicable to other countries

that have distinct healthcare and economic systems.

Future studies can test the findings generalizability

to other countries and regions. Another limitation is

the large dependence of the conclusion on the

accuracy and consistency of data obtained, which

covered daily Covid-19 instances, fatalities and

stock market returns. As such, future studies may

address such data limitation by examining data

garnered from other sources or using other methods

of data collection to compare the findings.

Moreover, future studies may conduct comparative

analyses among nations to determine differences in

the effects of Covid-19 pandemic on the industry

sectors and stock markets, and in so doing, the

elements and policy modifications that are distinct

to a particular country can be identified and in-depth

findings may be obtained. Another limitation relates

to the correlations between Covid-19 cases, industry

sectors and stock returns – correlations that may not

necessarily indicate causal causation. Such

causation may be supported in future studies

through reliable methods through the adoption of

instrumental variable methods or the use of

experimental designs. Also, this study focused on

Covid-19 cases and fatalities and how they

influence industry sectors and stock returns, and in

this regard, there are other variables and factors

(e.g., macroeconomic conditions, investors’

perceptions, and government steps) that may have a

hand in the relationships. Future studies may

examine these variables for a more enriching

investigation and correlation results between Covid-

19 and financial markets. They may also examine

Covid-19 resulting effects on the stock markets and

industry sectors in the long-term, and the role of

other entities, such as social security, central bank

and government steps in assisting stock exchange

market landscape during a pandemic or other crisis.

Finally, future studies can look into the initial

influence and the changes throughout time

(medium-long term) and the adjustments and

recovery of different sectors from the pandemic.

Resulting future findings may contribute to

explaining the dynamic relationships between

Covid-19, industry sectors, and financial markets

through the resolution of this study’s limitations.

Acknowledgement:

This work was supported by the Deanship of

Scientific Research, Vice Presidency for Graduate

Studies and Scientific Research, King Faisal

University, Saudi Arabia, under the Annual Funding

track, [GrantA065].

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Contribution of Individual Authors to the

Creation of a Scientific Article (Ghostwriting

Policy)

- Conceptualization: Abdalwali Lutfi, Nashat Ali

Almasria, Mohammed Faisal Hassan.

- Data curation: Nashat Ali Almasria

- Formal analysis: Hassan H Aldboush. Fadya

Burhan Alhajahmad

- Funding acquisition: Abdalwali Lutfi

- Investigation: Abdalwali Lutfi, Mohammed Faisal

Hassan

- Methodology: Fadya Burhan Alhajahmad,

Mohammed Faisal Hassan

- Project administration: Abdalwali Lutfi

- Resources: Hassan H Aldboush, Mahmaod

Alrawad

- Supervision, Mahmaod Alrawad

- Software: Fadya Burhan Alhajahmad

- Validation: Abdalwali Lutfi

- Visualization: Mohammed Faisal Hassan

- Writing – original draft: Nashat Ali Almasria,

- Writing – review & editing: Abdalwali Lutfi,

Mahmaod Alrawad

Sources of Funding for Research Presented in a

Scientific Article or Scientific Article Itself

This work was supported by the Deanship of

Scientific Research, Vice Presidency for Graduate

Studies and Scientific Research, King Faisal

University, Saudi Arabia, under the Annual Funding

track, [GrantA065].

Conflict of Interest

The authors have no conflicts of interest to declare.

Creative Commons Attribution License 4.0

(Attribution 4.0 International, CC BY 4.0)

This article is published under the terms of the

Creative Commons Attribution License 4.0

https://creativecommons.org/licenses/by/4.0/deed.en

_US

WSEAS TRANSACTIONS on BUSINESS and ECONOMICS

DOI: 10.37394/23207.2024.21.121

Abdalwali Lutfi, Nashat Ali Almasria,

Hassan H Aldboush, Mohammed Faisal Hassan,

Mahmaod Alrawad, Fadya Burhan Alhajahmad

E-ISSN: 2224-2899

1493

Volume 21, 2024