The Role of Corporate Culture in Bad Times: Evidence from the COVID-19 Pandemic

By Kai Li, Xing Liu, Feng Mai, Tengfei Zhang. Journal of Financial and Quantitative Analysis, 2020

197 citations recorded by the source corpus.

Abstract After fitting a topic model to 40,927 COVID-19–related paragraphs in 3,581 earnings calls over the period Jan. 22–Apr. 30, 2020, we obtain firm-level measures of exposure and response related to COVID-19 for 2,894 U.S. firms. We show that despite the large negative impact of COVID-19 on their operations, firms with a strong corporate culture outperform their peers without a strong culture. Moreover, these firms are more likely to support their community, embrace digital transformation, and develop new products than those peers. We conclude that corporate culture is an intangible asset designed to meet unforeseen contingencies as they arise.

Subfields: Accounting, Economics and Econometrics, Management Science and Operations Research

View Paper: https://www.semanticscholar.org/paper/dea37219fc1f50a2f78d2e956f7ac236f197156e

Citations in the corpus

• Does CSR matter in times of crisis? Evidence from the COVID-19 pandemic (2021, unknown): “…political uncertainty in the first quarter of 2020 (Hassan et al., 2019), a dummy variable equal to 1 for firms with strong corporate culture (Li et al., 2020b), and short- and long-term institutional ownership (Kim et al., 2019).9 We also control for two state-level variables of firms’…”