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    Corporate Resilience and Response During COVID-19
    12 Jun 2020Working Paper Summaries

    Corporate Resilience and Response During COVID-19

    by Alex Cheema-Fox, Bridget LaPerla, George Serafeim, and Hui (Stacie) Wang
    Investors look for evidence during a market crisis that a company is resilient. This study includes findings that challenge the notion that companies need to adopt practices that hurt their employees because investors want them to do so.
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    Author Abstract

    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.

    Paper Information

    • Full Working Paper Text
    • Working Paper Publication Date: April 2020
    • HBS Working Paper Number: HBS Working Paper #20-108
    • Faculty Unit(s): Accounting and Management
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    George Serafeim
    George Serafeim
    Charles M. Williams Professor of Business Administration
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