Elsevier

Finance Research Letters

Volume 42, October 2021, 101884
Finance Research Letters

Google search volumes and the financial markets during the COVID-19 outbreak

https://doi.org/10.1016/j.frl.2020.101884Get rights and content

Highlights

  • We measure public concern during the COVID outbreak with Google Trends (GT-COVID-19)

  • We consider the six most impacted countries, as of May 1 2020

  • The GT-COVID-19 indexes are related to the financial markets returns

  • The Italian GT-COVID-19 is a key explanatory variable in all the considered markets

  • The greatest impacts on the markets are synchronized with the Italian lockdowns

Abstract

During the outbreak of the COVID-19, concerns related to the severity of the pandemic have played a prominent role in investment decisions. In this paper, we analyze the relationship between public attention and the financial markets using search engine data from Google Trends. Our findings show that search query volumes in Italy, Germany, France, Great Britain, Spain, and the United States are connected with stock markets. The Italian Google Trends index is found to be the main driver of all the considered markets. Furthermore, the country-specific market impacts of COVID-19-related concerns closely follow the Italian lockdown process.

Keywords

COVID-19
Financial Markets
Google Trends

JEL classification

G41
G15
C32

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