The Role of Corporate Culture in Bad Times: Evidence from the COVID-19 Pandemic

Kai Li, Xing Liu, Feng Mai, Tengfei Zhang

Research output: Contribution to journalArticlepeer-review

115 Scopus citations

Abstract

After fitting a topic model to 40,927 COVID-19-related paragraphs in 3,581 earnings calls over the period Jan. 22-Apr. 30, 2020, we obtain firm-level measures of exposure and response related to COVID-19 for 2,894 U.S. firms. We show that despite the large negative impact of COVID-19 on their operations, firms with a strong corporate culture outperform their peers without a strong culture. Moreover, these firms are more likely to support their community, embrace digital transformation, and develop new products than those peers. We conclude that corporate culture is an intangible asset designed to meet unforeseen contingencies as they arise.

Original languageEnglish
Pages (from-to)2545-2583
Number of pages39
JournalJournal of Financial and Quantitative Analysis
Volume56
Issue number7
DOIs
StatePublished - 14 Nov 2021

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