ESG Didn’t Immunize Stocks Against the Covid-19 Market Crash

Demers, Elizabeth; Hendrikse, Jurian; Joos, Philip; Lev, Baruch

doi:10.2139/ssrn.3675920

Cited by 34 publications

(38 citation statements)

References 26 publications

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“…Although such approach is more typical for assessing the financial instruments, we find it suitable for our analysis as well. A similar approach that uses top and bottom deciles of performance indicators (for shares however) to identify winners or losers has been used by Demers et al (2020), for example.…”

Section: Methodsmentioning

confidence: 99%

Likely winners and losers in upcoming COVID-19 economic crisis – lessons learned from the GFC

Čadil

Beránek

Kovář

2021

JEEE

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Purpose The COVID-19 pandemic and subsequent efforts to contain it have started economic downturn that may even surpass the global financial crisis (GFC). The purpose of this study is to uncover the features of enterprises’ resilience during and after an external shock such as the GFC might be helpful in predicting the shock impact on enterprises and setting proper policy measures for the upcoming COVID-19 crisis. Design/methodology/approach The authors analysed the impact of the GFC on the entrepreneurial population in/of the Czech Republic using marginal effects method on a large random sample of 4,478 enterprises. In this analysis, the authors defined two groups of enterprises – “winners” and “losers” – based on the company’s dissolution and performance indicators. Findings The GFC struck the enterprise population asymmetrically in terms of the enterprises’ characteristics but also in terms of time. Micro and small size companies are the most vulnerable to external shocks such as the GFC. Technological level plays an important role in the recovery phase, especially in the case of manufacturing micro enterprises. Research limitations/implications Although there are differences between the GFC and the COVID-19 crisis, the GFC was the only comparable shock in modern history in its global nature, depth and unpredicted occurrence. It can be expected that the impact on enterprises can be partly similar. Practical implications Government support of micro size companies should be the priority in the upcoming COVID-19 crisis. Supporting the innovation and technology progress might accelerate the recovery phase after the crisis especially in micro companies as well. Originality/value This paper presents interesting insights into the impact of external shocks such as the GFC or COVID-19 on enterprises. It uncovers typical features of “winners” or “losers” of such shocks.

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Section: Methodsmentioning

confidence: 99%

Likely winners and losers in upcoming COVID-19 economic crisis – lessons learned from the GFC

Čadil

Beránek

Kovář

2021

JEEE

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“…Therefore, they want to know if the environment (environment), the rights of workers and more generally the community (social) and the basic rules of corporate governance (governance) have been respected [61]. By now, we are consolidating the awareness that the value creation of companies is closely related to environmental, social and governance (ESG) performance even in times of crisis [62,63]. As a result, companies that are now more attentive to ESG factors, which in the past was only the prerogative of large listed companies, are also more resilient to risks produced by complex and unpredictable phenomena such as health emergencies.…”

Section: The Link Between Resilience and Sustainabilitymentioning

confidence: 99%

Thriving, Not Just Surviving in Changing Times: How Sustainability, Agility and Digitalization Intertwine with Organizational Resilience

et al. 2021

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Nowadays, the buzzwords for organizations to be prepared for the competitive environment’s challenges are sustainability, digitalization, resilience and agility. However, despite the fact that these concepts have come into common use at the level of both scholars and practitioners, the nature of the relation between sustainability and resilience has not yet been sufficiently clarified. Above all, there is still no evidence of what factors determine greater resilience to change in an organization that also wants to be more sustainable, especially in times of crisis and discontinuity. This research aims to explore from a theoretical point of view, through the construction of a conceptual model, how these dimensions interact to help the business to become strategically resilient by leveraging digitization and agility as enablers. A new view of resilience arises from the study, which goes beyond the well-known ability to absorb or adapt to adversity, to also include a strategic attribute that could help companies capture change-related opportunities to design new ways of doing business under stress. A key set of strategically agile processes, enabled by digitalization, creates strategic resilience that also includes a proactive, opportunity-focused attitude in the face of change. Strategic resilience to lead to organizational sustainability must be understood as a multi-domain concept quite similar to the holistic view of sustainability: environment, economy and society. Finally, the research offers a set of propositions and a theoretical framework that can be empirically validated.

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“…Bae et al (2021) report that CSR positively affects stock returns during the crisis only if CSR activities are consistent with a firm's institutional environment. On the other hand, Demers et al (2020) find that ESG scores have no significant relation with U.S. listed firms' stock returns at the onset of the pandemic. They argue that it is premature to conclude that ESG helps immunize firms in this crisis.…”

Section: Effects Of Organizational Resourcesmentioning

confidence: 65%

Organizational Resources, Country Institutions, and National Culture Behind Firm Survival and Growth during COVID-19

Liu

Peng²,

Wei

et al. 2021

SSRN Journal

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ESG Didn’t Immunize Stocks Against the Covid-19 Market Crash

Cited by 34 publications

References 26 publications

Likely winners and losers in upcoming COVID-19 economic crisis – lessons learned from the GFC

Likely winners and losers in upcoming COVID-19 economic crisis – lessons learned from the GFC

Thriving, Not Just Surviving in Changing Times: How Sustainability, Agility and Digitalization Intertwine with Organizational Resilience

Organizational Resources, Country Institutions, and National Culture Behind Firm Survival and Growth during COVID-19

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