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

48 Pages Posted: 2 Apr 2020 Last revised: 26 May 2020

See all articles by Tarek Alexander Hassan

Tarek Alexander Hassan

Boston University

Stephan Hollander

Tilburg University - Tilburg School of Economics and Management

Laurence van Lent

Frankfurt School of Finance and Management

Ahmed Tahoun

London Business School

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Date Written: June 1, 2020

Abstract

Using tools described in our earlier work (Hassan et al., 2019, 2020), we develop 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 expect to gain or lose from an epidemic disease and which are most affected by the associated uncertainty as a disease spreads in a region or around the world. As Covid-19 spread globally in the first quarter of 2020, firms' primary concerns relate to the collapse of demand, increased uncertainty, and disruption in supply chains. Other important concerns relate to capacity reductions, closures, and employee welfare. Financing concerns were mentioned relatively rarely in the first quarter but appear to become a more important concern in the second quarter. We also identify some firms that foresee opportunities in new or disrupted markets due to the spread of the disease. Finally, we find some evidence that firms that have experience with SARS or H1N1 have more positive expectations about their ability to deal with the coronavirus outbreak.

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 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 )

595 Commonwealth Avenue
Boston, MA 02215
United States

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

Ahmed Tahoun

London Business School ( email )

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

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