The Resilience of French Companies to the COVID-19 Crisis

Abstract

This paper explores the resilience of French listed companies to the COVID-19 shock. We examine the effect of numerous firm characteristics related to financial flexibility, ownership structure, corporate governance, and corporate social responsibility on the stock returns during the COVID-19 shock. Our results show that French companies with more debt and less profitability experience worse stock returns, indicating the role played by financial flexibility. We also find that firms with greater ownership by short-term investors or active investors experience worse stock returns during the COVID-19 shock, suggesting that a base of shareholders with long-term orientation and commitment helps firms to weather the effect of market-wide shocks.

Keywords: COVID-19, financial crisis, French companies, debt, ownership structure

JEL Classification: F15, F23, F36, G01, G02, G14, G15