Do investors react differently? Evidence from hospitality sector during the covid-19 pandemic

Focusing on publicly traded U.S. eating & dining and lodging firms from 01July2019 to 30October2020, this paper examines investor reaction to restaurant and hotel firms throughout the Covid-19 pandemic. Results show that there is no consensus on buying or selling shares of different hospitality firms in the beginning. Consistent with the behavioral theory, the market reaction is mainly negative to restaurant firms matching with investors' negative sentiments while investors are indifferent towards lodging firms. In later stages, investors trade less stocks, and the buy pressure in the market leads to a positive reaction to both types of firms.