Corporate Immunity to the COVID-19 Pandemic

Wenzhi Ding, Ross Levine (), Chen Lin and Wensi Xie

No 27055, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Using data on over 6,000 firms across 56 economies during the first quarter of 2020, we evaluate the connection between corporate characteristics and stock price reactions to COVID-19 cases. We find that the pandemic-induced drop in stock prices was milder among firms with (a) stronger pre-2020 finances (more cash, less debt, and larger profits), (b) less exposure to COVID-19 through global supply chains and customer locations, (c) more CSR activities, and (d) less entrenched executives. Furthermore, the stock prices of firms with greater hedge fund ownership performed worse, and those of firms with larger non-financial corporate ownership performed better. We believe ours is the first paper to assess international, cross-firm stock price reactions to COVID-19 as functions of these pre-shock corporate characteristics.

JEL-codes: F23 G3 I10 M12 M14 (search for similar items in EconPapers)
Date: 2020-04
New Economics Papers: this item is included in nep-gen and nep-rmg
Note: CF
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Citations: View citations in EconPapers (116)

Published as Ding, Wenzhi & Levine, Ross & Lin, Chen & Xie, Wensi, 2021. "Corporate immunity to the COVID-19 pandemic," Journal of Financial Economics, Elsevier, vol. 141(2), pages 802-830.

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Journal Article: Corporate immunity to the COVID-19 pandemic (2021)
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