Learning financial survival from disasters

Onur Kemal Tosun, Arman Eshraghi and Yaz Muradoglu

Journal of International Financial Markets, Institutions and Money, 2023, vol. 85, issue C

Abstract: This study examines how firms learn financial survival from experience, and how stock markets price this learning. We study American firms during the Covid turmoil which had prior exposure to the 2008 Global Financial Crisis. Our results show firms exposed to the 2008 Crisis had 95% higher monthly stock returns during Covid compared to their unexposed peers. This highlights the role major crises play in shaping organisational resilience. The organisational learning we illustrate includes a strong element of CEO learning but is not exclusive to senior management. Our empirical findings are stronger for firms in ‘shutdown sectors’ and persist after controlling for state interventions, as well as other control factors and estimation windows.

Keywords: Financial Markets; Covid-19 Crisis; 2008 Financial Crisis; Firm Behaviour (search for similar items in EconPapers)
JEL-codes: C33 G12 G32 L20 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:intfin:v:85:y:2023:i:c:s104244312300046x

DOI: 10.1016/j.intfin.2023.101778

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