Corporate Resilience and Response During COVID-19
29 Pages Posted: 17 Apr 2020 Last revised: 19 May 2020
Date Written: May 18, 2020
The coronavirus pandemic caused a sharp market decline while raising heterogeneous responses across companies related to their employees, supply chain and, repurposing of operations to provide needed products and services. We study whether during the 2020 COVID-19 induced market crash, investors differentiated across companies based on their human capital, supply chain, and products and service response. Using data derived from natural language processing applied to news coverage of corporate responses to the coronavirus crisis for 3,078 companies around the world, we find that more positive sentiment around a company’s response is associated with less negative returns. This is especially true for companies with more salient responses, in industries with tasks that entail more manual routine labor and most negatively impacted by COVID-19 lockdowns, and in countries where companies focus more on customer satisfaction and use digital technologies in their operations.
Keywords: human capital, supply chain, crisis management, operations, investor behavior, ESG, COVID-19, coronavirus
JEL Classification: M11, M12, M14, M21, M41, M54, G01, G23, G14
Suggested Citation: Suggested Citation