Contagious corporate reputation risk: Uncovering the pandemic's impact

Zhen Xi, Yawen Xia, Rubi Yang, Ran Hu and Jing Zhao

Finance Research Letters, 2024, vol. 67, issue PB

Abstract: Firms' Reputation Risk Index (RRI) co-move with their industry and local peers in the US market, suggesting that managers follow their industry and local peers to conduct ESG-related irresponsible activities. Moreover, the RRI co-movement with local peers is attenuated during the COVID-19 pandemic period, and the reduction is more significant in democratic states with stringent social distancing policies and in states with higher pandemic mortality rates. In contrast, the industry-level RRI co-movement is not significantly affected during the pandemic period. Our findings suggest that social interactions among local managers may be an essential driver for the regional RRI co-movement before the pandemic.

Keywords: ESG; Reputation Risk; Co-movement; COVID-19 pandemic; Social distancing (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:67:y:2024:i:pb:s1544612324008948

DOI: 10.1016/j.frl.2024.105864

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