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On the resilience of ESG firms during the COVID-19 crisis: evidence across countries and asset classes

Author

Listed:
  • Gianfranco Gianfrate

    (EDHEC Business School)

  • Mirco Rubin

    (EDHEC Business School)

  • Dario Ruzzi

    (Bank of Italy)

  • Mathijs Dijk

    (Erasmus University)

Abstract

We use the exogenous shock of COVID-19 to explore the resilience of firms with strong ESG (environmental, social, and governance) ratings across 63 countries and three asset classes: stocks, credit default swaps (CDS), and corporate bonds. We show that the resilience of strong ESG firms is not a consistent global phenomenon outside of North America and varies considerably across countries. Additional evidence points towards a substitution effect between firm-level sustainability performance as captured by ESG ratings and country-level sustainability performance especially in terms of healthcare coverage. Overall, our findings indicate that the capacity of strong ESG firms to serve as “rainy day assets” is geography-dependent and that ESG considerations can also affect international corporate debt markets.

Suggested Citation

  • Gianfranco Gianfrate & Mirco Rubin & Dario Ruzzi & Mathijs Dijk, 2024. "On the resilience of ESG firms during the COVID-19 crisis: evidence across countries and asset classes," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 55(8), pages 1069-1084, October.
    • Handle: RePEc:pal:jintbs:v:55:y:2024:i:8:d:10.1057_s41267-024-00718-2
    DOI: 10.1057/s41267-024-00718-2
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    References listed on IDEAS

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