The Value of Employee Satisfaction in Disastrous Times: Evidence from COVID-19
By Chenyu Shan, D. Tang. Social Science Research Network, 2020
131 citations recorded by the source corpus.
Employee treatment is an important but challenging element of corporate environmental, social, and governance (ESG) policies. Satisfying employee needs can increase corporate productivity, but is also costly to shareholders. Using unique data for Chinese publicly listed firms, we show that having satisfied employees is valuable to the firm. Specifically, firms with higher employee satisfaction scores withstand COVID-19 better, in terms of stock market performance. Such an effect is more pronounced for firms with more intangible assets and in knowledge-based industries. Moreover, higher employee satisfaction scores predict better operating performance. While not fully revealed in tranquil times, the effect of employee satisfaction is materialized when the firms experience negative shocks, such as COVID-19. Our findings suggest that firms can do well in crisis periods by doing good in normal times.
Subfields: Economics and Econometrics, Management Science and Operations Research, Organizational Behavior and Human Resource Management
View Paper: https://www.semanticscholar.org/paper/8397f9aab97a67e269b1cf646589d39993b4e18b
Citations in the corpus
- The Role of Corporate Culture in Bad Times: Evidence from the COVID-19 Pandemic (2020, unknown): “Using survey data on employee satisfaction, Shan and Tang (2020) show that Chinese firms with higher employee”
- Does CSR matter in times of crisis? Evidence from the COVID-19 pandemic (2021, unknown): “Using a sample of Chinese firms, Shan and Tang (2020) find that pre-crisis employee satisfaction is associated with higher stock returns during the crisis.”
- Resiliency of Environmental and Social Stocks: An Analysis of the Exogenous COVID-19 Market Crash (2020, unknown): “Shan and Tang (2020) document that Chinese firms with greater employee satisfaction appear to endure the COVID-19 stock market downturn better than other firms, supporting employee satisfaction as one dimension of ES policies creating shareholder value (Edmans 2011).”