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Isolating defensive corporate ESG effects: Evidence from purely domestic anti-COVID-19 measures

John W. Goodell, Shaen Corbet, Hou, Yang (Greg), Yang Hu and Les Oxley

Journal of Financial Stability, 2024, vol. 71, issue C

Abstract: Few studies investigate whether ESG mitigates the harmful effects of changes in firms’ external environments. We evidence that ESG mitigated the impact of COVID-19 work-from-home and workplace prescriptions amongst several other pandemic-related government regulatory interventions, even when controlling for firm size. In a novel approach, we apply scrutiny of firms to restrict our cross-national sample to only firms with no cross-border trade, that is, explicitly domestically focused operational processes irrespective of the endpoint of corporate sales, enhancing methodological robustness. Consequently, we isolate an ESG effect. Results indicate the existence of a premium during the onset of each analysed national pandemic experience, particularly pronounced for those corporations that had achieved more substantiative ESG-based preparation and development before the onset of the COVID-19 pandemic.

Keywords: ESG; Government response; Market capitalisation; COVID-19; Returns; Volatility (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finsta:v:71:y:2024:i:c:s1572308924000056

DOI: 10.1016/j.jfs.2024.101220

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Journal of Financial Stability is currently edited by I. Hasan, W. C. Hunter and G. G. Kaufman

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