The Impact of the COVID-19 Pandemic on Firm Performance

Abstract

Using the financial data of listed Chinese companies, we study the impact of COVID-19 on corporate performance. We show that COVID-19 has a negative impact on firm performance. The negative impact of COVID-19 on firm performance is more pronounced when a firm's investment scale or sales revenue is smaller. We show, in an additional analysis, that the negative impact of COVID-19 on firm performance is more pronounced in serious-impact areas and industries. These findings are among the first empirical evidence of the association between pandemic and firm performance.

How do equity markets react to COVID-19? Evidence from emerging and developed countries

“…They find that the impact of COVID-19 varies across different industries, ownership structure, and firm size. Shen, Fu, Pan, Yu, and Chen (2020) and Xiong, Wu, Hou, and Zhang (2020) examine the reaction of Chinese listed stocks to the lockdown in Wuhan due to the COVID-19 outbreak and find that the impact varies across different industries, firm size, profitability, growth opportunity, leverage, and fixed assets. They also find that the negative impact of COVID-19 on firm performance is more pronounced in China’s regions with high confirmed cases of COVID-19 and specific industries that were adversely affected by COVID-19.…”

Intervention and Improved Well-Being of Basic Science Researchers During the COVID 19 Era: A Case Study

“…From the corporate perspective, all industries have been affected during COVID-19 pandemic, including the energy, tourism, transportation, and retail and manufacturing sectors (Fu and Shen, 2020;Shen et al, 2020). For instance, the performance of companies belonging to energy sectors is found to be negatively impacted in a study performed on the corporate performance in the energy industry by the panel data and Difference-in-Difference model (Fu and Shen, 2020).…”

Rapid detection of fast innovation under the pressure of COVID-19

“…However, the business environment is turbulent and in constant change. The destructive current situation brought by the global pandemic of COVID-19 is affecting health care, economy, transportation, and other fields in different industries and regions [23]. A major negative impact is related to firm performances [24].…”