ABSTRACT

This paper investigates the short-term impact of the coronavirus (COVID-19) outbreak on the stock market tipping points in all affected countries across the globe. The consequences of infectious disease are considerable and have been directly affecting stock market system worldwide. Using the Lotka-Volterra complex system theory approach, this study develops the complex dynamical model for investigating the role of the pandemic towards the stock market tipping points. Our results indicate that the stock markets in major affected economic zones fell quickly after the virus outbreak. The North America economic zone experienced more negative abnormal returns in the second phase of 2019-2020 as compared to other economic zones. Further results confirmed that, the promotion of the stock market value traded improves the tipping point locations to large values and thus, enhances an exponential growth of the stock market system. Moreover, the study of market systems can be applied as an optimal control approach to reduce the economic risks, increase stock market system resilience, and avoid economic collapse.