Gurrib, Ikhlaas2021-07-062021-07-06© 20212021-10-18Gurrib, I. (2021). Early COVID-19 policy response on healthcare equity prices. Studies in Economics and Finance, 38(5), 987-1006. https://doi.org/10.1108/SEF-02-2021-007510867376https://doi.org/10.1108/SEF-02-2021-0075http://hdl.handle.net/20.500.12519/399This article is not available at CUD collection. The version of scholarly record of this article is published in Studies in Economics and Finance (2021), available online at: https://doi.org/10.1108/SEF-02-2021-0075Purpose: This paper aims to investigate the implementation of the short selling ban policy imposed by the Italian stock exchange on health-care stock prices, as a tool to mitigate COVID-19 price effects. Important contributions are in terms of assessing the effect of the temporary short selling ban on restricted health-care stocks; the effect of COVID-19 cases and crude oil price volatility onto health-care stocks; and whether COVID-19 resulted in a change in the risk and average stock price of health-care stocks. Design/methodology/approach: The methodology involves impulse responses to capture the shock of the short selling ban onto health-care stocks, and Markov switching regimes to capture the effect of COVID-19 onto the risk and prices in the health-care industry. Daily data from 9 November 2018 till 23 December 2020 is used. Findings: Findings suggest there were significant changes in average prices in health-care technology and health-care services stocks before, during and after the short selling ban. Shocks to the number of COVID-19 cases and crude oil price volatility impacted health-care stocks but lasted only for a few days. While daily changes in the number of COVID-19 cases impacted some health-care stocks in the presence of a two-state Markov regime, insignificant coefficients and relatively low duration suggest that the short selling policy did not significantly change the average price and risk in health-care stocks to explain a two-state regime in the health-care industry. Research limitations/implications: Insignificant coefficients in a two-state Markov regime reinforce that short-selling policies have a short-lasting effect onto health-care equity prices. The findings are limited by the duration of the short selling policy, the pandemic event and the health-care industry. Originality/value: This is the first study to look at the impact of early COVID-19 and short selling ban policy on health-care stocks. © 2021, Emerald Publishing Limited.enThis article is © Emerald Publishing Limited and permission has been granted for this version to appear here (https://repository.cud.ac.ae/). Emerald does not grant permission for this article to be further copied/distributed or hosted elsewhere without the express permission from Emerald Publishing Limited.COVID-19Health-care stock pricesShort-selling banArticleCopyright : © 2021, Emerald Publishing Limited.