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Working Paper HBS Working Paper Series 2020 Corporate Resilience and Response During COVID-19 |
The coronavirus pandemic caused a sharp market decline while raising heterogeneous responses across companies related to their employees, supply chain and, repurposing of operations to provide needed products and services. We study whether during the 2020 COVID-19 induced market crash, investors differentiated across companies based on their human capital, supply chain, and products and service response. Using data derived from natural language processing applied to news coverage of corporate responses to the coronavirus crisis for 3,078 companies around the world, we find that more positive sentiment around a company’s response is associated with less negative returns. This is especially true for companies with more salient responses, in industries with tasks that entail more manual routine labor and most negatively impacted by COVID-19 lockdowns, and in countries where companies focus more on customer satisfaction and use digital technologies in their operations.
Keywords: COVID-19; coronavirus; crisis response plans; crisis; ESG; ESG (environmental, social, governance) performance; ESG ratings; Leadership & Corporate Accountability; big data; Machine learning; investor behavior; Institutional investors; Corporate performance; Health Pandemics; Crisis Management; Corporate Social Responsibility and Impact; Human Capital; Supply Chain; Operations; Leadership; Corporate Accountability; Performance;
Cheema-Fox, Alex, Bridget LaPerla, George Serafeim, and Hui (Stacie) Wang. "Corporate Resilience and Response During COVID-19." Harvard Business School Working Paper, No. 20-108, April 2020. (Revised May 2020.)
