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This paper analyzes the moderation effect of government responses on the impact of the COVID-19 pandemic, proxied by the daily growth in COVID-19 cases and deaths, on the capital market, i.e., the S&P 500 firm’s daily returns. Using the Oxford COVID-19 Government Response Tracker, we monitor 16 daily indicators for government actions across the fields of containment and closure, economic support, and health for 180 countries in the period from January 1, 2020 to March 15, 2021. We find that government responses mitigate the negative stock market impact and that investors’ sentiment is sensitive to a firm’s country-specific revenue exposure to COVID-19. Our findings indicate that the mitigation effect is stronger for firms that are highly exposed to COVID-19 on the sales side. In more detail, containment and closure policies and economic support mitigate negative stock market impacts, while health system policies support further declines. For firms with high revenue exposure to COVID-19, the mitigation effect is stronger for government economic support and health system initiatives. Containment and closure policies do not mitigate stock price declines due to growing COVID-19 case numbers. Our results hold even after estimating the spread of the pandemic with an epidemiological standard model, namely, the susceptible-infectious-recovered model.

This paper examines the impact of firms' dissemination of corporate social responsibility (CSR) information through Facebook on corporate reputation. We investigate this relationship empirically by using a corporate reputation index that tracks non-professional stakeholders' daily perceptions of corporate reputation over time. We find that firms disclosing CSR information on Facebook experience a decrease in reputation. If we differentiate Facebook postings based on whether their content provides environmental or social information, we only find a negative effect on reputation for firms posting social information (quality effect). However, reputation is not affected by the number of CSR postings (quantity effect).

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