Firm-Level Exposure to Epidemic Diseases: COVID-19, SARS, and H1N1

65 Pages Posted: 2 Apr 2020 Last revised: 15 Dec 2020

See all articles by Tarek A. Hassan

Tarek A. Hassan

Boston University; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Stephan Hollander

Tilburg University - Tilburg School of Economics and Management

Laurence van Lent

Frankfurt School of Finance and Management

Markus Schwedeler

Boston University

Ahmed Tahoun

London Business School

Multiple version iconThere are 3 versions of this paper

Date Written: June 1, 2020

Abstract

We introduce a new word pattern-based method to automatically classify firms' primary concerns related to the spread of epidemic diseases raised in their quarterly earnings conference calls. We construct text-based measures of the costs, benefits, and risks listed firms in the US and over 80 other countries associate with the spread of COVID-19 and other epidemic diseases. We identify which firms and sectors expect to lose/gain from a given epidemic and which are most affected by the associated uncertainty. Our new automatic pattern-based method shows how firms' primary concerns (varying from the collapse in demand and disruptions in their production facilities or supply chain, to financing concerns) are changing over time and varying geographically as epidemics spread regionally and globally. We find that the COVID-crisis manifests itself at the firm-level as a simultaneous shock to both demand and supply. In prior epidemics, in contrast, firm discussions center more on shortfalls in demand. In 2020, supply and financing-related concerns are relatively more salient in regions where the spread of COVID-19 is less contained.

Keywords: epidemic diseases, pandemic, exposure, virus, firms, uncertainty, sentiment, machine learning

JEL Classification: I15, I18, D22, G15

Suggested Citation

Hassan, Tarek Alexander and Hollander, Stephan and van Lent, Laurence and Schwedeler, Markus and Tahoun, Ahmed, Firm-Level Exposure to Epidemic Diseases: COVID-19, SARS, and H1N1 (June 1, 2020). Available at SSRN: https://ssrn.com/abstract=3566530 or http://dx.doi.org/10.2139/ssrn.3566530

Tarek Alexander Hassan

Boston University ( email )

270 Bay State Road
Boston, MA 02215
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Stephan Hollander

Tilburg University - Tilburg School of Economics and Management ( email )

P.O. Box 90153
Tilburg, DC Noord-Brabant 5000 LE
Netherlands
+31 13 466 8288 (Phone)
+31 13 466 8001 (Fax)

HOME PAGE: http://www.uvt.nl/people/s.hollander

Laurence Van Lent (Contact Author)

Frankfurt School of Finance and Management ( email )

Adickesallee 32-34
Frankfurt am Main, 60322
Germany

HOME PAGE: http://www.laurencevanlent.org

Markus Schwedeler

Boston University ( email )

595 Commonwealth Avenue
Boston, MA 02215
United States

Ahmed Tahoun

London Business School ( email )

Sussex Place
Regent's Park
London, London NW1 4SA
United Kingdom

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
1,089
Abstract Views
5,575
rank
20,699
PlumX Metrics