Impacts of COVID-19 on U.S. Apparel Industry Based on the Fama-French Five Factor Model

Abstract

The COVID-19 pandemic has caused a grievous global economic loss and many industries were destroyed by this crisis. Nevertheless, many apparel companies had a remarkable financial performance last year. This research applied the Fama-French Five Factor Model to analyze the influence on the apparel industries under the epidemic. Based on the daily data from Kenneth R. Frencha’s database, this paper chose the relevant 18 months data, selecting the outbreak point in February, 2020, as the dividing line. June, 2019 to February, 2020 is the period that before the pandemic, while March, 2020 to November, 2020 is the post-pandemic period. According to the results by multiple regression analysis, it found out that coronavirus pandemic had a radical effect on the apparel industry. Under the influence of COVID-19, investors preferred to put their money in relative aggressive companies to seek new investment opportunities. Therefore, investors need to pay attention to the financial situation and its product, which could be risky for their future development.