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Elasticity of ESSM stock volatility: an analysis of the collapse of U.S., European, and Chinese markets during the COVID-19 pandemic

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  • Muhammad Jawad

    (HITEC University)

  • Munazza Naz

    (Fatima Jinnah Women University)

Abstract

The COVID-19 pandemic and its subsequent eradication precipitated a rare and unexpected stock market crash. This crisis presents a unique opportunity to evaluate environmental, social, sustainable, and management (ESSM) policy choices. This study contributes by demonstrating the application of ESSM concerns and investment decision investment horizons and showing the significance of the long-term perspective in ESSM investment decision-making. From January 2020 to December 2022, stocks with higher ESSM ratings had significantly greater returns, less return arbitrariness, and larger operational profit margins. ESSM ventures with more advertising expenditures had higher stock returns; however, investors more predisposed toward ESSM saw less return arbitrariness during market crises. This study emphasizes the importance of investor and consumer loyalty to the elasticity of ESSM stocks.

Suggested Citation

  • Muhammad Jawad & Munazza Naz, 2025. "Elasticity of ESSM stock volatility: an analysis of the collapse of U.S., European, and Chinese markets during the COVID-19 pandemic," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 11(1), pages 1-26, December.
    • Handle: RePEc:spr:fininn:v:11:y:2025:i:1:d:10.1186_s40854-024-00747-8
    DOI: 10.1186/s40854-024-00747-8
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