Abstract
This research investigated the daily abnormal stock returns of 727 listed companies from 63 countries. We tested the impact of two major COVID-19 related events-(1) the declaration by the World Health Organisation of the global pandemic and (2) the vaccine discovery announcement by Pfizer/BioNTech-on transportation stock price reactions. We found that the pandemic declaration event negatively affected transportation stocks, whereas the vaccine announcement had a positive effect. Passenger markets were more affected than freight markets. Airlines stocks were most struck during the pandemic, whereas railroad companies were unaffected. However, airlines were the best performers following the vaccine discovery event. During the pandemic incident, European transportation firms were hit to a large extent; however, they also rebounded well during the vaccine event. Transportation firms in emerging markets were hit more than those in developed markets; however, both recovered to the same degree during the vaccine event. Transportation firms from countries with higher exposure to China were affected less than those with lower exposure during both events. Our implications are relevant to how investors make investment decisions surrounding market uncertainty. Moreover, corporate managers can refer to the findings when they formulate their firm's financial policies and operations to respond to stock market reactions in the wake of the pandemic. Our results can also help policymakers evaluate and deploy effective policies to boost investor confidence and keep transportation firms viable during a crisis. Overall, the findings can be used for future policy formulation in the transportation industry.