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

2021/06/14 by Kai Li, Xing Liu, Feng Mai +1 · 263 citations
Business, Management and Accounting · Decision Sciences · Economics, Econometrics and Finance · Medicine · #2019-20 coronavirus outbreak #Accounting #Asset (computer security) #Auditing, Earnings Management, Governance #Business #COVID-19 Pandemic Impacts #Computer science #Computer security #Coronavirus disease 2019 (COVID-19) #Earnings #Economics #Impact of AI and Big Data on Business and Society #Management #Medicine #Organizational culture #Pandemic #Severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) #Virology

paper · doi:10.1017/s0022109021000326

published in Journal of Financial and Quantitative Analysis 56(7), 2545-2583 (Cambridge University Press)

openalex publication_date 2021/06/14 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/31

Abstract

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.

Citations

• On Persistence in Mutual Fund Performance
• Probabilistic topic models
• Evidence on the Characteristics of Cross Sectional Variation in Stock Returns

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