Abstract
Stock markets across the world have exhibited varying degrees of volatility following the recent COVID-19 pandemic. We have examined the effect of this pandemic on stock market volatility and whether economic strength, measured by a set of selected country-level economic characteristics and factors such as economic resilience, intensity of capitalism, level of corporate governance, financial development, monetary policy rate and quality of health system, can potentially mitigate the possible detrimental effect of the global pandemic on stock market volatility. Using data from 34 developed and emerging markets, we have found that these country-level economic characteristics and factors do help to reduce the volatility arising due to the virus pandemic. The results of this paper are important as policymakers can use these economic factors to set policy responses to tackle extraordinary heat in the global stock market in order to avoid any possible future financial crisis.