Firms' responses to the COVID-19 pandemic

Maximilian Klöckner; Christoph G Schmidt; Stephan M Wagner; Morgan Swink

doi:10.1016/j.jbusres.2023.113664

Firms' responses to the COVID-19 pandemic

J Bus Res. 2023 Mar:158:113664. doi: 10.1016/j.jbusres.2023.113664. Epub 2023 Jan 11.

Authors

Maximilian Klöckner¹, Christoph G Schmidt¹, Stephan M Wagner¹, Morgan Swink²

Affiliations

¹ ETH Zurich, Department of Management, Technology, and Economics, Weinbergstrasse 56/58, 8092 Zurich, Switzerland.
² Texas Christian University, Neeley Business School, PO Box 298530, Fort Worth, TX 76129, United States.

Abstract

The COVID-19 pandemic requires firms to adequately respond. In this study, we first explore in our empirical data how firms responded to the COVID-19 crisis and identify five tactical response types, operational, digitalization, financial, supportive, and organizational responses. Furthermore, our findings indicate that responses vary in scope; Some firms act on their own, while others engage in collaborations. Finally, we find that the response angle is different across firms, as some firms leverage potential and others primarily mitigate risk. Second, we follow an event study design to measure the financial implications of these responses. We find that responses to the COVID-19 pandemic generally entail a positive stock market reaction. Financial and digitalization responses, as well as risk mitigation responses, are consistently evaluated positively. We discuss our findings in context of different theoretical lenses, substantiating the emerging literature on the COVID-19 crisis, and the established literature on crisis response management.

Keywords: COVID-19; Crisis response management; Event study; Pandemic.