Do environmental and social practices matter for the financial resilience of companies? Evidence from US firms during the COVID-19 pandemic

Hachmi Ben Ameur () and Selma Boussetta ()
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Hachmi Ben Ameur: INSSEC Grande Ecole
Selma Boussetta: University of Bordeaux

Review of Quantitative Finance and Accounting, 2025, vol. 65, issue 1, No 5, 149-183

Abstract: Abstract This paper contributes to the understanding of the relation between the environmental and social positioning of companies and the financial resilience in the specific context of the COVID-19 crisis. Resilience is measured through two dimensions based on stock price data: the severity of loss which captures the stability and the duration of recovery which captures the flexibility dimension. Using a sample of 1508 US based firms, we provide evidence that firms with high environmental and social (ES) rating were more resilient than low ES rating firms during the COVID-19 pandemic by lessening the severity of price drop and recovering faster. This effect is enhanced by using a non-linear approach based on quantiles. Further, we provide evidence that the effect of ES on resilience is focused on the environmental and social components. Interestingly, we show that management and shareholders sub-categories of the governance rating, have no impact on firm’s time to recovery during pandemic crisis.

Keywords: Corporate social responsibility; Financial resilience; Stock market; Us companies (search for similar items in EconPapers)
JEL-codes: G10 G14 M14 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s11156-023-01218-4

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