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Corporate Resilience and Response to COVID‐19

Corporate Resilience and Response to COVID‐19 The global COVID crisis provides a test case for the argument that public companies, by making significant and credible commitments to their stakeholder relationships, signal their resilience to investors and, by so doing, cushion their market values against a general collapse. As one example, by limiting layoffs, providing flexible work schedules, and offering paid sick leave, companies are likely to maintain higher employee productivity and avoid costs associated with excessive employee turnover. And companies that adapt their supply chains quickly to avoid costly production halts and secure the supply of important materials should have stronger relationships that result in both higher quality and lower long‐run costs. Yet another possibility is that companies that temporarily redirect operations to provide needed products and services such as masks and ventilators could experience stronger customer and brand loyalty. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Applied Corporate Finance Wiley

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Publisher
Wiley
Copyright
Copyright © 2021 Cantillon and Mann
ISSN
1078-1196
eISSN
1745-6622
DOI
10.1111/jacf.12457
Publisher site
See Article on Publisher Site

Abstract

The global COVID crisis provides a test case for the argument that public companies, by making significant and credible commitments to their stakeholder relationships, signal their resilience to investors and, by so doing, cushion their market values against a general collapse. As one example, by limiting layoffs, providing flexible work schedules, and offering paid sick leave, companies are likely to maintain higher employee productivity and avoid costs associated with excessive employee turnover. And companies that adapt their supply chains quickly to avoid costly production halts and secure the supply of important materials should have stronger relationships that result in both higher quality and lower long‐run costs. Yet another possibility is that companies that temporarily redirect operations to provide needed products and services such as masks and ventilators could experience stronger customer and brand loyalty.

Journal

Journal of Applied Corporate FinanceWiley

Published: Jun 1, 2021

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