Build resilience to overcome panic? Examining the global capital market during the COVID-19 pandemic

Using stock indexes from 56 countries/regions and sovereign bond indexes from 57 countries during 2019/12/31 to 2021/12/31, we investigate the global market reactions to the COVID-19 pandemic after considering the resilience of supply chain and logistics. Both stock and bond markets have dropped significantly during the pandemic period; however, such a pandemicinduced drop in stock and bond markets becomes weaker for countries/regions with resilient supply chain and better logistics performance. Such effects are stronger when there is no COVID19 vaccine and government policy responses to COVID-19 spread becomes stringent. A long-short portfolio of the stock and bond indexes from the countries/regions with the best and worst supply chain and logistics can generate significant abnormal returns.