Resilience and Asset Pricing in COVID-19 Disaster

Elham Daadmehr ()
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Elham Daadmehr: Department of Economics and Management “Marco Fanno”, University of Padua, 35123 Padova, Italy

Economies, 2025, vol. 13, issue 5, 1-35

Abstract: The COVID-19 pandemic potentially affected stock prices in two non-mutually exclusive ways: discount rates and cash flows. This paper focuses on the latter and analyzes it through the lens of an asset-pricing model. It shows how workplace resilience and financial resilience interacted and significantly affected asset prices. The model-based equity premium increases with the probability of a disaster. The results suggest the significant amplification of workplace resilience by financial resilience. Specifically, the dividend growth of low-resilience firms is significantly more responsive to workplace flexibility and suffers more severely than that of high-resilience firms.

Keywords: financial resilience; workplace resilience; dynamic functional principal components; Markov switching; COVID-19 disaster; equity premium (search for similar items in EconPapers)
JEL-codes: E F I J O Q (search for similar items in EconPapers)
Date: 2025
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