COVID-19 Outbreak and Industry Reactions: Evidence from Colombo Stock Exchange

Chiranthana Manohari Dissanayaka, Niluka Anuradha


Moving along history, it can be identified that the human race has experienced many types of challenges which did have the capacity to decide human existence or extinction from the beginning. Some of these challenges were created by humans by themselves like world wars and some were created by natural forces like natural disasters and deadly viruses.Recently COVID-19 has taken place as a rapidly spreading virus by causing more than two million deaths and more than 95 million cases around the world as being the sixth global pandemic creating considerable influence to different industries such as agriculture, health and transportation in the world. The propose of this study is to identify the impact of COVID-19 on the performance of the industries in Sri Lanka. Using the two events and the event study methodology it is found that industry groups such as automobiles, materials, health care and equipment, household and personal care products are the significantly positively affected industries where industries like insurance and transportation have been negatively affected in Sri Lanka. As per the real business-cycle theory these fluctuations in the industries consider as business cycle fluctuations and the efficient response to exogenous changes in the real economic environment. Hence this impact does not last long, investors and the government can recover quickly with the implementation of effective monetary policies and investment diversifications


COVID-19; Event study; Colombo Stock Exchange; Global Industry Classification; Real Business Cycle Theory

Full Text:



Aktas, N., Bodt, E. D., & Cousin, J. G. (2007). Event Studies with a Contaminated Estimation Period. Journal of Corporate Finance, 13(1), 129-145. doi:

Ashraf, B. N. (2020). Stock markets’ reaction to COVID-19: Cases or fatalities? Research in International Business and Finance, 54. doi:

Baker, S. R., Bloom, N., Davis, S. J., Kost, K., Sammon, M., & Viratyosin, T. (2020). The Unprecedented Stock Market Reaction to COVID-19.

Bolonne, H. (2020). The Effect of COVID-19 to Apparel Sector, Sri Lanka. Moratuwa: Business Research Unit Faculty of Business University of Moratuwa. Retrieved from

Chen, M. H., Jang, S., & Kim, W. G. (2007). The Impact of the SARS Outbreak on Taiwanese Hotel Stock Performance: An Event-study Approach. International Journal of Hospitality Management, 26(1), 200-212. doi:

Chowdhury, M. T., Sarkar, A., Paul, S. K., & Moktadir, M. A. (2020). A Case study on Strategies to Deal with the Impacts of COVID-19 Pandemic in the Food and Beverage Industry. Operations Management Research. doi:

Deaton, B., & Deaton, B. J. (2020). Food Security and Canada's Agricultural System Challenged by COVID-19. Canadian Journal of Agricultural Economics, 68(2), 143-149. doi:

Eroğlu, H. (2021). Efects of Covid 19 Outbreak on Environment and Renewable Energy Sector. Environment, Development and Sustainability, 23, 4782-4790. doi:

Hai-ying, G., & Chang-we, W. (2020). Impacts of the COVID-19 Pandemic on Vegetable Production and Countermeasures from an Agricultural Insurance Perspective. Journal of Integrative Agriculture, 19(12), 2866-2876. doi:

Haroon, O., & Rizvi, S. A. (2020). COVID-19: Media Coverage and Financial Markets Behavior- A Sectoral Inquiry. Journal of Behavioral and Experimental Finance, 27. doi:

Hassounah, M., Raheel, H., & Alhefzi, M. (2020). Digital Response During the COVID-19 Pandemic in Saudi Arabia. Journal of Medical Internet Research, 22(9). Retrieved from

He, P., Sun, Y., Zhan, Y., & Li, T. (2020). COVID-19's Impact on Stock Prices Across Different Sectors- An Event Study Based on the Chinese Stock Market. Emerging Markets finance and Trade, 56(10), 2198-2212. doi:

Kemp, P. S., Froese, R., & Pauly, D. (2020). COVID-19 Provides an Opportunity to Advance a Sustainable UK Fisheries Policy in a Post-Brexit Brave New World. Marine Poicy, 104-114. doi:

Liu, H. Y., Manzoor, A., Wang, C. Y., Zhang, L., & Manzoor, Z. (2020). The COVID- 19 Outbreak and Affected Countries Stock Markets Response. International journal of Environmental Research and Public health, 17(8), 2800. doi:

McEwan, K., Marchand, L., Shang, M., & Bucknel, D. (2020). Potential Implications of COVID-19 on The Canadian Pork Industry. Journal of Canadian Agricultural Economics, 68, 201-206. doi:

McTier, B. C., Tse, Y., & Wald, J. K. (2013). Do Stock Markets Catch the Flu? Journal of Financial and Quantitative Analysis, 48(3), 979 -1000. Retrieved from

Pavlyshenko, B. M. (2020). Regression Approach for Modeling COVID-19 Spread and Its Impact on Stock Markets. Retrieved from

Ramasamy, D. (2020). Impact Analysis in Banking, Insurance and Financial services industry due to COVID-19 Pandemic. Pramana Research Journal, 10(8), 19-29. Retrieved from

Ramelli, S., & Wagner, A. F. (2020). Feverish Stock Price Reaction to COVID-19. Financial Economics, 9(3), 622-655. doi:

Ru, H., Yang, E., & Zou, K. (2020). What Do We Learn from SARS-Cov-1 to SARS- Cov-2: Evidence from Global Stock Markets. doi:

Schell, D., Wang, M., & Huynh, T. L. (2020). This Time is Indeed Different : A Study on Global Market Reactions to Public health Crisis. Journal of Behavioral and Experimental Finance, 27. doi:

Senol, D. Z., & Zeren, D. F. (2020). Coronavirus ( COVID-19) and Stock Markets: The Effect of the Pandemic on the Global Economy. Eurasian Journal of research in Social and Economics, 7(4), 1-16. Retrieved from

Siche, R. (2020). What is The Impact of COVID-19 Disease on Agriculture? Scientia Agropecuaria, 3-6. doi:

Simposen, B. (2014). Money, Banking, and the Business Cycle. Palgrave Macmillan US. doi:10.1057/9781137336569

Sivesan, S. (2020). Beyond Collapse: The Message of COVID–19 to the Sri Lankan Tourism Industry. Journal of Tourismology, 6(2), 147-154. doi:

Solomon, S., Rao, G. P., & Swapna, M. (2020). Impact of COVID-19 on Indian Sugar Industry. Sugar Tech, 22(4), 547-551. doi:

Suresh, K., Sivaguru, T., Darmalingam, S., Suresh, J., & Wilson, C. (2020). The Impact of COVID-19 on the Sri Lankan Tourism Sector ang Its Future Prospects. American Journal of Humanities and Social Sciences Research (AJHSSR), 4(11), 146-153.

Susilwati, Falefi, R., & Purwoko, A. (2020). Impact of COVID-19’s Pandemic on the Economy of Indonesia. Budapest International Research and Critics Institute-Journal (BIRCI-Journal), 3(2), 1147-1156. doi:

Uğur, N. G., & Akbıyık, A. (2020). Impacts of COVID-19 on Global Tourism Industry: A Cross-Regional Comparison. Tourism Management Perspectives, 36. doi:

Wang, Y., Zhang, D., Wang, X., & Fu, Q. (2020). How Does COVID-19 Affect China’s Insurance Market? Emerging Markets Finance and Trade, 56(10), 2350-2362. doi:

Worku, A., & Mersha, D. (2020). The Effect of COVID -19 on Insurance Industry in Ethiopia. Horn of Africa Journal of Business and Economics (HAJBE)(1), 39-44.

Zhang, X. (2020). Broadband and Economic Growth in China: An Empirical Study During the COVID-19 Pandemic Period. Telematics and Informatics, 58. doi:

Zhong, H., Tan, Z., He, Y., Xie, L., & Kang, C. (2020). Implications of COVID-19 for the Electricity Industry: A Comprehensive Review. CSEE Journal of Power and Energy Systems, 6(3), 489-495. Retrieved from



  • There are currently no refbacks.

Copyright (c) 2022 Chiranthana Manohari Dissanayaka, Niluka Anuradha

Creative Commons License
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

This Journal Indexed by:



Creative Commons License
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.