Corporate immunity to the COVID-19 pandemic

By Wenzhi Ding, Ross Levine, Chen Lin, Wensi Xie. Journal of Financial Economics, 2020

1,928 citations recorded by the source corpus.

We evaluate the connection between corporate characteristics and the reaction of stock returns to COVID-19 cases using data on more than 6,700 firms across 61 economies. The pandemic-induced drop in stock returns was milder among firms with stronger pre-2020 finances (more cash and undrawn credit, less total and short-term debt, and larger profits), less exposure to COVID-19 through global supply chains and customer locations, more corporate social responsibility activities, and less entrenched executives. Furthermore, the stock returns of firms controlled by families (especially through direct holdings and with non-family managers), large corporations, and governments performed better, and those with greater ownership by hedge funds and other asset management companies performed worse. Stock markets positively price small amounts of managerial ownership but negatively price high levels of managerial ownership during the pandemic.

Subfields: Accounting, Economics and Econometrics, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/65a156447f6944b9de17b50bf584f8758dc2dc8c

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Citations in the corpus

Corporate Social Responsibility and Organizational Resilience to COVID-19 Crisis: An Empirical Study of Chinese Firms (2020, background): “[78], one of the first research conducted on the influence of pre-2020 characteristics over firm resilience in COVID-19 provides empirical evidence that firms with stronger finance capacity, less exposure to global supply chain, and more CSR activities tend to suffer less severely from stock price d”
A First Look at the Impact of COVID-19 on Commercial Real Estate Prices: Asset-Level Evidence (2020, neutral): “location of the firm’s underlying assets (e.g., Ramelli and Wagner 2020; Ding et al. 2020; Hassan et al. 2020; Gerding, Martin, and Nagler 2020).”
ESG Ratings and Stock Performance during the COVID-19 Crisis (2021, background): “[11] find that high CSR-rated firms are associated with better stock performance in terms of higher stock returns and lower stock volatility during times of crisis.”
Financial Constraints and Small and Medium Enterprises: A Review* (2020, background): “Evidence shows that constrained firms tend to plan deep cuts in employment, as well as in capital spending (Campello et al., 2010).”
Working Remotely and the Supply-Side Impact of COVID-19 (2020, neutral): “…and dividends, (Barrero et al. 2021; Landier and Thesmar 2020; Gormsen and Koijen 2020); firm exit (Bartik et al. 2020); stockmarket performance (Ding et al. 2021; Giglio et al. 2020; Baker et al. 2020); or consumer spending (Baker et al. 2020; Coibion, Gorodnichenko, andWeber 2020a) during…”
Aggregate and Firm-Level Stock Returns During Pandemics, in Real Time (2020, neutral): “7See, for example, Baker et al. (2020); Fahlenbrach et al. (2020); Ding et al. (2020); ?”
Trade credit and supplier competition (2019, background): “, Cuñat (2007)), renegotiating debt (e.g., Wilner (2000)), or salvaging repossessed inventory upon borrower’s default (e.”