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The blame game: COVID-19 crisis and financial performance

Author

Listed:
  • Rayenda Khresna Brahmana

    (University of Bahrain)

  • Doddy Setiawan

    (Universitas Sebelas Maret)

  • Maria Kontesa

    (Universitas Widya Dharma Pontianak)

Abstract

This research investigates the manager’s impression management during the COVID-19 pandemic by gauging the agency theory framework. We examine how managers blame COVID-19 when the firms experience declining performance to retain their reputation. Overall, our results indicate that those firms with declining performance will blame COVID-19 compared to those with expected performance. It also indicates that the odds of COVID-19 appearing in the financial report will be higher in the declining performance firms. Our analysis confirms the impression management theory and agency theory by suggesting that, under declining performance, managers blame COVID-19 as the justifications to alter the attention from their incapability to the black swan event.

Suggested Citation

  • Rayenda Khresna Brahmana & Doddy Setiawan & Maria Kontesa, 2022. "The blame game: COVID-19 crisis and financial performance," SN Business & Economics, Springer, vol. 2(11), pages 1-20, November.
    • Handle: RePEc:spr:snbeco:v:2:y:2022:i:11:d:10.1007_s43546-022-00352-w
    DOI: 10.1007/s43546-022-00352-w
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