Thesis Public Defense | VNP26 - Trần Phước Bảo Minh

The influence of vaccination on business confidence during COVID-19 pandemic

Student: Trần Phước Bảo Minh, VNP26

Supervisor: Dr. Vũ Thị Hồng Nhung

Abstract:

At the time of this research, the COVID-19 pandemic has claimed more than 5 million lives and pushed the global economy into a deep recession with 97 million people around the world into poverty on less than $1.9 a day, accompanied by a remarkable increase in  unemployment rate. Is there any way to reduce this negative impact on the economy? In “General theory of employment, interest, and money” published in 1936, Keynes used the concept of the “animal spirit” to emphasize the importance of business confidence in understanding business cycle and economic fluctuations. Confidence was also known as the root of the global financial crisis in 2008. But what determines business confidence? Using the data of 22 EU countries, this study found that vaccination is effective in boosting business confidence during the COVID-19 pandemic. This relationship is even stable and highly statistically significant across many robustness tests. Furthermore, the study also found that the positive effect of vaccination on business confidence is even larger when the containment policies is tightened, which highlights the importance of vaccination in maintaining business confidence. To the best of our knowledge, this is the first study to discover the nexus between vaccination and business confidence.

JEL classification: E22, E23, E70, H32, I18

Keywords: vaccination, business confidence, lockdown policies, COVID-19 pandemic, behavioral economics.