The impact of COVID-19 on stock market liquidity: Fresh evidence on listed Chinese firms

Nicholas Apergis, Chi Keung Lau, Bing Xu

Research output: Contribution to journalArticlepeer-review


This paper examines the impact of the COVID-19 pandemic on the liquidity of Chinese stock market, while accounting for heterogeneity and transmission channels. The analysis incorporates important innovations relative to previous literature. It incorporates both global and national COVID-19 proxies to measure the severity of the pandemic, providing fresh insights into its disruptive effect on the Chinese stock market. While all businesses are expected to experience significant economic losses due to the pandemic, it is important to recognise the effects can vary across firms. Our study as indicates that COVID-19 shocks can have a negative impact on liquidity by influencing three critical factors: earnings dispersion, equity risk premia, and trade credit restrictions. These findings hold substantial importance for both governments and regulators, who should take actions to stimulate stock market liquidity and provide support to affected firms.
Original languageEnglish
Article number102847
JournalInternational Review of Financial Analysis
Early online date9 Aug 2023
Publication statusPublished - Nov 2023


  • COVID-19
  • Chinese firms
  • Earnings dispersion
  • Equity risk premia
  • Stock market liquidity
  • Trade credit restrictions

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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