Corporate Resilience and Response to COVID-19
Journal of Applied Corporate Finance, Volume 33, Number 2, Spring 2021. To access paper, use this link https://onlinelibrary.wiley.com/share/author/YWEAEYPDWUAAPJPMRWGN?target=10.1111/jacf.12457
Posted: 17 Apr 2020 Last revised: 4 Feb 2022
Date Written: September 23, 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 3,023 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 and in industries that those responses are more likely to represent a credible commitment to their stakeholders.
Keywords: human capital; supply chain; crisis management; operations; ESG; COVID-19
JEL Classification: M11, M12, M14, M21, M41, M54, G01, G23, G14
Suggested Citation: Suggested Citation