Investment Strategies in Pandemic Situations: An Analysis and Comparison of Prospective Returns between Developed and Emerging Markets


  • Konstantin Kostin Saint-Petersburg State University of Economics
  • Philippe Runge
  • Ronald Adams


COVID-19; pandemic; asset pricing; Fama French three factor model; cost of equity investment; behavioural finance; developed; emerging; panel data.


This study empirically analyzes return data from developed and emerging markets to assess whether emerging markets show superior performance during the COVID-19 pandemic in terms of cost of equity. It analyses panel data from eight country indices of developed and emerging countries as well as eight exemplary companies from developed and emerging countries, covering the period from 2000 to 2020. The results provide evidence that emerging markets do not perform in a better way than developed markets. The findings highlight the need for a reassessment of the generalized notion that emerging markets are more profitable than developed markets in such crises which affect the core of their economic structure. It provides investors with meaningful advice on the creation of an investment strategy if they wish to perform equity investments in similar periods like the COVID-19 pandemic. The study contributes to the literature by advancing this research area and is the first study which analyzes and compares the cost of equity of developed and emerging markets during the COVID-19 pandemic.