Corporate resilience during COVID-19

During a market collapse, it is strategically important for a company to be evaluated as resilient, thereby maintaining trust among investors. The authors study whether during the 2020 COVID-19 induced market crash, investors differentiate across companies based on a firm’s human capital, supply chain and operating crisis response. Using data derived from natural language processing of news around corporate responses to the coronavirus crisis, they find that companies with more positive sentiment exhibit higher institutional investor money flows and less negative returns than their competitors. This is especially true for companies with more salient responses.

Corporate Resilience and Response during COVID19_April 20