Claudia

Introduction#

The UK was not included in the sample since 2020 was also the year of conclusion of the Brexit deal and thus, as the last historical event to add to the 2020 collection, we saw the UK exiting the European Union on December 24, 2020.

It is not necessarily to write about (details of) sampling considerations in your introduction. Better save that for the data & methodology section.

Reactions varied also according to the pandemics’ epicenter location which shifted from China to Europe and consequently to the US.

This is kind of the key ‘novelty’ of your research, and the core of your research question. Consider advertising it a little bit more, and explain what exactly happened, and why it’s interesting. Maybe you can touch upon how coronavirus itself, and arising expectations, and behavior of people are influenced by shifting epicenters and rising (and falling) numbers of infections, and what the aggregate economic effects on financial markets might be.

The available literature rarely focuses exclusively on the European geographical area and there is a gap concerning the analysis of the European markets' reaction to the pandemic.

This is not the best justification of your work! Try to come up with stronger arguments, for example, arguments arising from the implications of coronavirus and changing expectations for the economy. Then, you can argue that Europe is a nice setting because similar institutional environments, but large temporal and spatial variations of coronavirus intensity over the period.

You can also argue (if you agree with it, at least), that coronavirus models that incorporate behavioral changes not as a response to government measures, but rather to the known number of infections are models that do well in predicting effectiveness of government measures.

Hypotheses#

Your hypotheses seem nice, but you might be able to perform more precise analyses, especially regarding the first hypothesis. Coronavirus didn’t just come and go, but it comes in varying degrees of intensity. Could it, for example, also be that decreasing numbers of infections cause positive abnormal returns?

In general, think about specific theories leading to positive and negative returns related to covid.