Environmental stocks, CEO health risk and COVID-19

Carlos Fernández-Méndez; Shams Pathan

doi:10.1016/j.ribaf.2021.101509

Environmental stocks, CEO health risk and COVID-19

Res Int Bus Finance. 2022 Jan:59:101509. doi: 10.1016/j.ribaf.2021.101509. Epub 2021 Aug 11.

Authors

Carlos Fernández-Méndez¹, Shams Pathan²

Affiliations

¹ Department of Business Administration, University of Oviedo, Spain.
² School of Economics, Finance and Property, Curtin University, Australia.

Abstract

During the COVID-19 pandemic, we find that Australian firms with environmentally sustainable practices generated higher abnormal returns. Firms with CEOs who were exposed to significant health risks from COVID-19 experienced poorer stock market performance. Firms with low pre-COVID default risk and high pre-COVID liquidity performed better during the COVID-19 stock market crash. This research signifies the importance of environmental sustainability for Australian firms to endure pandemics such as COVID-19.

Keywords: CEO health risk; COVID-19; Default risk; Environmental sustainability.