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Isolating defensive corporate ESG effects: Evidence from purely domestic anti-COVID-19 measures

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  • Goodell, John W.
  • Corbet, Shaen
  • Hou, Yang (Greg)
  • Hu, Yang
  • Oxley, Les

Abstract

Few studies investigate whether ESG mitigates the harmful effects of changes in firms’ external environments. We evidence that ESG mitigated the impact of COVID-19 work-from-home and workplace prescriptions amongst several other pandemic-related government regulatory interventions, even when controlling for firm size. In a novel approach, we apply scrutiny of firms to restrict our cross-national sample to only firms with no cross-border trade, that is, explicitly domestically focused operational processes irrespective of the endpoint of corporate sales, enhancing methodological robustness. Consequently, we isolate an ESG effect. Results indicate the existence of a premium during the onset of each analysed national pandemic experience, particularly pronounced for those corporations that had achieved more substantiative ESG-based preparation and development before the onset of the COVID-19 pandemic.

Suggested Citation

  • Goodell, John W. & Corbet, Shaen & Hou, Yang (Greg) & Hu, Yang & Oxley, Les, 2024. "Isolating defensive corporate ESG effects: Evidence from purely domestic anti-COVID-19 measures," Journal of Financial Stability, Elsevier, vol. 71(C).
    • Handle: RePEc:eee:finsta:v:71:y:2024:i:c:s1572308924000056
    DOI: 10.1016/j.jfs.2024.101220
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    Cited by:

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    3. Li, Yiping & Zheng, Lanxing & Xie, Chang & Fang, Jiming, 2024. "Big data development and enterprise ESG performance: Empirical evidence from China," International Review of Economics & Finance, Elsevier, vol. 93(PB), pages 742-755.

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