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COVID-19 and safer investment bets.

ABSTRACT: I examine the spillover effects across the three different long-short portfolio indices during the COVID-19 pandemic. The relative outperformance of the ESG portfolio, reported by Nofsinger and Varma (2014) and Lins et al. (2017), comes from the fact that the probability of its returns getting affected by the other safer investment strategies increases during an economic slowdown. It implies that investors become more attentive to corporate fundamentals - causing capital flowing away from the defensive and EAFE portfolios to the ESG portfolio during crisis periods. Investors find refuge in the ESG approach as it focuses on the long-run sustainability of firms.

SUBMITTER: Singh A

PROVIDER: S-EPMC7431328 | biostudies-literature | 2020 Oct

REPOSITORIES: biostudies-literature

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COVID-19 and safer investment bets.

Singh Amanjot A

Finance research letters 20200818

I examine the spillover effects across the three different long-short portfolio indices during the COVID-19 pandemic. The relative outperformance of the ESG portfolio, reported by Nofsinger and Varma (2014) and Lins et al. (2017), comes from the fact that the probability of its returns getting affected by the other safer investment strategies increases during an economic slowdown. It implies that investors become more attentive to corporate fundamentals - causing capital flowing away from the de ...[more]

PMID: 32837387

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Project description:A variety of mitigation strategies have been employed against the Covid-19 pandemic. Social distancing is still one of the main methods to reduce spread, but it entails a high toll on personal freedom and economic life. Alternative mitigation strategies that do not come with the same problems but are effective at preventing disease spread are therefore needed. Repetitive mass-testing using PCR assays for viral RNA has been suggested, but as a stand-alone strategy this would be prohibitively resource intensive. Here, we suggest a strategy that aims at targeting the limited resources available for viral RNA testing to subgroups that are more likely than the average population to yield a positive test result. Importantly, these pre-selected subgroups include symptom-free people. By testing everyone in these subgroups, in addition to symptomatic cases, large fractions of pre- and asymptomatic people can be identified, which is only possible by testing-based mitigation. We call this strategy smart testing (ST). In principle, pre-selected subgroups can be found in different ways, but for the purpose of this study we analyze a pre-selection procedure based on cheap and fast virus antigen tests. We quantify the potential reduction of the epidemic reproduction number by such a two-stage ST strategy. In addition to a scenario where such a strategy is available to the whole population, we analyze local applications, e.g. in a country, company, or school, where the tested subgroups are also in exchange with the untested population. Our results suggest that a two-stage ST strategy can be effective to curb pandemic spread, at costs that are clearly outweighed by the economic benefit. It is technically and logistically feasible to employ such a strategy, and our model predicts that it is even effective when applied only within local groups. We therefore recommend adding two-stage ST to the portfolio of available mitigation strategies, which allow easing social distancing measures without compromising public health.

Project description:BackgroundDuring the past two years, the COVID-19 pandemic has cost millions of lives around the globe, caused major morbidity and provoked widespread economic and social disruption. In response, governments have enacted policies to mitigate the impacts of the pandemic. This research focuses in on policies aimed at increasing access to essential health products and services by comparing them to the global rules governing trade, investment and intellectual property. We have assessed whether these rules have or could have constrained countries in responding to this and future crises. The study identifies the nature and scope of the trade-related health sector policies implemented by our sample group of countries, selected because of their systemic significance: the United States, Germany, France, China, South Africa and India. Each policy is placed into one of five broad categories covered by trade and investment rules so that we could assess their consistency with those rules.ResultsWe found, among other things, that the types of trade-related health measures were quite diverse. The high-income countries in our study were the most active in the policy space and tended to rely on subsidies-based measures while the middle-income countries relied more heavily on export and import measures. Policies directly relevant to intellectual property protection were virtually non-existent. When evaluating the implemented policies against the global trade and investment rules, we found potential constraints under five different types of rules: those governing subsidies, import and export trade barriers, investment measures, government procurement and trade-related intellectual property.ConclusionsGiven the tension between the global rules and the practices of policymaking during the pandemic, we conclude that the tension must be resolved in favor of governments making policy rather than relying on existing exceptions or pushing national governments to comply more exactly with the rules. Although the pandemic itself does not respect national borders, governance still generally occurs at the national level because national governments are often the only entities with both the legal authority and the practical ability to respond.

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COVID-19 and safer investment bets.

Publications

COVID-19 and safer investment bets.

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