Corporations and Covid-19

Corporations and Covid-19

  • 17 June 2021
  • Online

The videos of each session are available under the presentation tab on this page and also on the ECGI YouTube channel
 

Corporations and Covid-19

 A European Corporate Governance Institute (ECGI) Project

in collaboration with
The University of Oxford, Saïd Business School
Review of Corporate Finance Studies (RCFS)
The Review of Financial Studies (RFS),

Supported by

Norges Bank Investment Management

Online Workshop | 17 June 2021
Conference | University of Oxford | 2 June 2022

Click here to download the programme

Background

The Covid-19 pandemic is an unprecedented shock that has required unique responses from many corporations. Understanding how they have responded is of first-order importance for the fields of corporate governance, corporate finance and stewardship. While some insights begin to emerge, others will take time and depend on more complete data sets to become available, such as financial statements and governance records for 2020.

Such data typically comes from annual reports and proxy statements. US companies with a December 31 fiscal year hold their annual meetings in the spring. They typically file their annual reports by the end of March, but in 2019, some 30 percent of the 7,000 reports were filed in April and later. While firms also publish quarterly data, most release comprehensive annual data only 90 days after their fiscal year-end, so the earliest date that a large sample of data on US firms will be available is April 2021. These dates may be similar or even later for firms in other countries.

To provide a forum for scholars analysing corporate responses to the pandemic that are informed by comprehensive datasets, The European Corporate Governance Institute (ECGI), in collaboration with the University of Oxford, the Review of Corporate Finance Studies (RCFS) and the Review of Financial Studies (RFS), organised an online workshop in 2021 and subsequent will host a physical conference in 2022 on ‘Corporations and Covid-19’. The two events are part of a wider ECGI project funded by Norges Bank Investment Management.

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Organising Committee

Renée Adams (Chair), University of Oxford and ECGI
Marco Becht, Solvay Brussels School, Université libre de Bruxelles and ECGI
Andrew Ellul, Indiana University and ECGI (Sponsoring Editor, Review of Corporate Finance Studies)
Itay Goldstein, Wharton School (Sponsoring Editor, Review of Financial Studies)
Jiri Knesl, University of Oxford
Holger Mueller, New York University and ECGI (Sponsoring Editor, Review of Financial Studies)
Paola Sapienza, Northwestern University and ECGI

 

Programme Committee

Bo Becker, Stockholm School of Economics and ECGI
Alon Brav, Duke University and ECGI
Claire Celerier, University of Toronto
Rudy Fahlenbrach, EPFL - Ecole Polytechnique Fédérale de Lausanne and ECGI
Lily Fang, Insead
Daniel Ferreira, London School of Economics and ECGI
Ron Gianmmarino, University of British Columbia, Sauder School of Business
Mariassunta Giannetti, Stockholm School of Economics and ECGI
Mireia Giné, IESE Business School – University of Navarra and ECGI
Rainer Haselmann, Goethe University
Bige Kahraman, University of Oxford
Matti Keloharju, Aalto University
Theresa Kuchler, NYU Stern
Mark Leary, Washington University in St. Louis
Nadya Malenko, University of Michigan and ECGI
Adair Morse, University of California, Berkeley
Kasper Nielsen, Copenhagen Business School
Charlotte Østergaard, BI Norwegian Business School and ECGI
Paige Ouimet, University of North Carolina
Yihui Pan, University of Utah
Giorgia  Piacentino, Columbia Business School
Markus Schmid, University of St Gallen
Nicolas Serrano Velarde, Bocconi University
Kelly Shue, Yale University
Boris Vallee, Harvard Business School
Yongxiang Wang, Shenzhen Finance Institute
Yupana Wiwattanakantang, National University of Singapore (NUS) and ECGI
Yishay Yafeh, The Hebrew University of Jerusalem and ECGI
Tracy Yue Wang, University of Minnesota

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Contact:

Programme queries: Renee.Adams@sbs.ox.ac.uk

Administrative queries: admin@ecgi.org

We are no longer accepting submissions for the June 2021 online workshop.

A second call for papers will issue in summer 2021 for the 2022 conference.

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About ECGI

The ECGI is global research network and international scientific non-profit association providing a forum for debate and dialogue between academics, legislators and practitioners, focusing on major corporate governance issues. 

 

About Norges Bank Investment Management:

Norges Bank Investment Management (NBIM) is the asset management unit of the Norwegian central bank (Norges Bank), managing the Government Pension Fund Global. 

NBIM is an institutional member of ECGI.

 

Thursday, 17 June 2021 | 15:00 CEST

15:00
- 16:00

Session 1

Back to full programme

Welcome and Introduction

Time:
15:00h

Speakers

Fellow Research Member Institutional Member Board Member
Back to full programme

Corporations and Covid-19: An Investor's Perspective

Time:
15:10h

Speakers

Back to full programme

How Covid-19 has affected the research landscape

Time:
15:25h

Speakers

15:50

Break

16:00
- 17:15

Session 2: Working from Home

16:00

The Consequences of Working from Home: Evidence from Sell-Side Analysts

Speakers:
Back to full programme

The Consequences of Working from Home: Evidence from Sell-Side Analysts

Time:
16:00h

The COVID-19 pandemic has resulted in a massive shift in the number of employees working from home (WFH). Bick, Blandin, and Mertens (2020) document that the fraction of the workforce WFH increased from roughly 8% in February 2020 to more than 35% by May of 2020. Further, the shift towards WFH is unlikely to fully revert after the pandemic ends. A recent survey by PWC finds that more than 50% of workers are interested in working from home at least three days a week even after COVID-19 is no longer a concern (PWC, 2021).

While many workers are clearly enthusiastic about WFH, the value implications to corporations is unclear. Proponents of WFH argue that it can enhance firm value by increasing worker productivity (e.g., due to eliminating commuting and minimizing distractions) and/or allowing companies to attract and retain talented employees who value this flexibility. On the other hand, critics argue that WFH can encourage shirking, reduce focus, limit opportunities for valuable collaboration, and potentially attract lower-quality employees. Existing empirical evidence is also mixed.

However, there is also evidence that WFH can attract less productive workers (Emanuel and Harrington, 2020) and leads to declines in performance for more cognitively challenging tasks (Kunn, Seel, and Zegners, 2020). In this paper, we examine the consequences of WFH among sell-side analysts. Sell-side analysts provide an excellent laboratory for studying the consequences of WFH for several reasons.

Authors: Russell Jame and Marcus Painter

Speakers

Conference Documents

16:15

Locked-in at Home: Female Analysts' Attention at Work during the COVID-19 Pandemic

Speakers:
Back to full programme

Locked-in at Home: Female Analysts' Attention at Work during the COVID-19 Pandemic

Time:
16:15h

This paper explores the shock of school closures caused by the COVID-19 pandemic to study the effect of domestic responsibilities on analysts’ attention at work. School closures significantly reduce the forecast timeliness of female analysts rather than that of male analysts. Using manually-collected data on whether analysts have children, I show that mothers are 20% less likely to issue timely forecasts after school closures. Professional women are more likely to get distracted from work by domestic duties, which makes it harder for them to be as successful as their male counterparts in competitive industries.

Author: Mengqiao Du

Speakers

Conference Documents

16:30

Remotely Productive: The Economics of Long-Distance CEOs

Speakers:
Back to full programme

Remotely Productive: The Economics of Long-Distance CEOs

Time:
16:30h

We provide the first evidence on the efficacy of long-distance working arrangements between CEOs and firms. Long-distance CEOs underperform according to operating performance, insider reviews, and announcement returns to CEO departures. These effects are stronger when the CEO’s commute is longer and crosses multiple time zones. Using the quality of schools available to the CEO’s children as an instrument for the decision to commute, we argue that these effects are causal. CEOs’ private costs of working remotely have long-run effects on their strategic decisions and on the future of their firms. Remote CEOs are 60% more likely to sell their firm to an acquirer, and they do so at bargain prices.

Authors: Ran Duchin and Denis Sosyura

Speakers

Conference Documents

17:00

General Discussion

17:15
- 18:30

Session 3: Survival

17:15

Corporate liquidity during the COVID-19 crisis: The trade credit channel

Back to full programme

Corporate liquidity during the COVID-19 crisis: The trade credit channel

Time:
17:15h

Using unique daily data of payment defaults on suppliers in France, we show how the trade credit channel amplified the demand shock that firms met during the COVID-19 crisis. That channel dramatically increased short-term liquidity needs during the first months of the pandemic. A one standard deviation higher ratio of net debt to suppliers over sales increases the probability of payment default by roughly a third in sectors that were forced to shut down. This effect is extremely heterogeneous across sectors as well as across firms, depending on financing constraints. Understanding the cyclical trade credit dynamics is central for policy makers seeking to enable illiquid but solvent companies to remain afloat until revenues recover.

Authors: Benjamin Bureau, Anne Duquerroy and Frédéric Vinas

Speakers

Conference Documents

17:30

The Cyclical Growth of Public Firms and the COVID Crisis

Back to full programme

The Cyclical Growth of Public Firms and the COVID Crisis

Time:
17:30h

We document a significant but declining size effect and cyclicality in sales growth within U.S. public firms, including the COVID crisis. The patterns differ significantly from those documented in prior studies which focus on samples dominated by private firms. Small public firms grow faster than large public firms since the start of our sample period in 1974, especially during expansions, but the gap declines significantly starting in early 2000s and closes entirely during the 2020 recession. Contrary to the prevailing view in the literature, financing constraints do not explain the size effect, and the effect is stronger in 2020 than in the Great Recession during which constraints were, arguably, more severe. We examine alternative explanations for the size effect, including diversification, fallen angels, and differences in investment opportunities. Preliminary analysis shows evidence inconsistent with the first two hypotheses. The size effect increases market shares of large firms in recession, but this is counteracted by new entry, thus, mitigating the effects on industry structures across business cycles.

Speakers

Conference Documents

17:45

Outlasting the Pandemic: Corporate Payout and Financing Decisions During Covid-19

Back to full programme

Outlasting the Pandemic: Corporate Payout and Financing Decisions During Covid-19

Time:
17:45h

The outbreak of the Covid-19 pandemic massively increased uncertainty about firms’ cash flows and access to financial markets. We examine its effect on firms’ strategies for preserving cash by suspending dividends and share repurchase programs and raising new funds through bond and equity issues. Our estimates suggest that between March and December 2020 US firms saved a combined $86bn by suspending or reducing dividend payments and another $140bn from suspending buybacks. We identify a short list of firm and stock characteristics that explain most of the cross-sectional variation in firms’ payout and financing decisions. We show that the expansive monetary policies pursued by the Federal Reserve in the early phase of the pandemic crucially affected the timing and sequencing of firms’ decisions. Announcement effects on stock returns were highly unusual during the pandemic as dividend and buyback suspensions were associated with a more rapid recovery in firms’ stock prices, consistent with investors interpreting them as prudent actions that helped reduce risks.

Authors: Davide Pettenuzzo, Riccardo Sabbatucci and Allan Timmermann

Speakers

Conference Documents

18:15

General Discussion

Speakers

Presentations

Back to all presentations

Welcome and Introduction

Time:
15:00h

Speakers

Fellow Research Member Institutional Member Board Member
Back to all presentations

Corporations and Covid-19: An Investor's Perspective

Time:
15:10h

Speakers

Back to all presentations

How Covid-19 has affected the research landscape

Time:
15:25h

Speakers

Video: 

The Consequences of Working from Home: Evidence from Sell-Side Analysts

Back to all presentations

The Consequences of Working from Home: Evidence from Sell-Side Analysts

Time:
16:00h

The COVID-19 pandemic has resulted in a massive shift in the number of employees working from home (WFH). Bick, Blandin, and Mertens (2020) document that the fraction of the workforce WFH increased from roughly 8% in February 2020 to more than 35% by May of 2020. Further, the shift towards WFH is unlikely to fully revert after the pandemic ends. A recent survey by PWC finds that more than 50% of workers are interested in working from home at least three days a week even after COVID-19 is no longer a concern (PWC, 2021).

While many workers are clearly enthusiastic about WFH, the value implications to corporations is unclear. Proponents of WFH argue that it can enhance firm value by increasing worker productivity (e.g., due to eliminating commuting and minimizing distractions) and/or allowing companies to attract and retain talented employees who value this flexibility. On the other hand, critics argue that WFH can encourage shirking, reduce focus, limit opportunities for valuable collaboration, and potentially attract lower-quality employees. Existing empirical evidence is also mixed.

However, there is also evidence that WFH can attract less productive workers (Emanuel and Harrington, 2020) and leads to declines in performance for more cognitively challenging tasks (Kunn, Seel, and Zegners, 2020). In this paper, we examine the consequences of WFH among sell-side analysts. Sell-side analysts provide an excellent laboratory for studying the consequences of WFH for several reasons.

Authors: Russell Jame and Marcus Painter

Speakers

Conference Documents

Video: 

Locked-in at Home: Female Analysts' Attention at Work during the COVID-19 Pandemic

Back to all presentations

Locked-in at Home: Female Analysts' Attention at Work during the COVID-19 Pandemic

Time:
16:15h

This paper explores the shock of school closures caused by the COVID-19 pandemic to study the effect of domestic responsibilities on analysts’ attention at work. School closures significantly reduce the forecast timeliness of female analysts rather than that of male analysts. Using manually-collected data on whether analysts have children, I show that mothers are 20% less likely to issue timely forecasts after school closures. Professional women are more likely to get distracted from work by domestic duties, which makes it harder for them to be as successful as their male counterparts in competitive industries.

Author: Mengqiao Du

Speakers

Conference Documents

Video: 

Remotely Productive: The Economics of Long-Distance CEOs

Back to all presentations

Remotely Productive: The Economics of Long-Distance CEOs

Time:
16:30h

We provide the first evidence on the efficacy of long-distance working arrangements between CEOs and firms. Long-distance CEOs underperform according to operating performance, insider reviews, and announcement returns to CEO departures. These effects are stronger when the CEO’s commute is longer and crosses multiple time zones. Using the quality of schools available to the CEO’s children as an instrument for the decision to commute, we argue that these effects are causal. CEOs’ private costs of working remotely have long-run effects on their strategic decisions and on the future of their firms. Remote CEOs are 60% more likely to sell their firm to an acquirer, and they do so at bargain prices.

Authors: Ran Duchin and Denis Sosyura

Speakers

Conference Documents

Video: 

Corporate liquidity during the COVID-19 crisis: The trade credit channel

Back to all presentations

Corporate liquidity during the COVID-19 crisis: The trade credit channel

Time:
17:15h

Using unique daily data of payment defaults on suppliers in France, we show how the trade credit channel amplified the demand shock that firms met during the COVID-19 crisis. That channel dramatically increased short-term liquidity needs during the first months of the pandemic. A one standard deviation higher ratio of net debt to suppliers over sales increases the probability of payment default by roughly a third in sectors that were forced to shut down. This effect is extremely heterogeneous across sectors as well as across firms, depending on financing constraints. Understanding the cyclical trade credit dynamics is central for policy makers seeking to enable illiquid but solvent companies to remain afloat until revenues recover.

Authors: Benjamin Bureau, Anne Duquerroy and Frédéric Vinas

Speakers

Conference Documents

Back to all presentations

The Cyclical Growth of Public Firms and the COVID Crisis

Time:
17:30h

We document a significant but declining size effect and cyclicality in sales growth within U.S. public firms, including the COVID crisis. The patterns differ significantly from those documented in prior studies which focus on samples dominated by private firms. Small public firms grow faster than large public firms since the start of our sample period in 1974, especially during expansions, but the gap declines significantly starting in early 2000s and closes entirely during the 2020 recession. Contrary to the prevailing view in the literature, financing constraints do not explain the size effect, and the effect is stronger in 2020 than in the Great Recession during which constraints were, arguably, more severe. We examine alternative explanations for the size effect, including diversification, fallen angels, and differences in investment opportunities. Preliminary analysis shows evidence inconsistent with the first two hypotheses. The size effect increases market shares of large firms in recession, but this is counteracted by new entry, thus, mitigating the effects on industry structures across business cycles.

Speakers

Conference Documents

Video: 

Outlasting the Pandemic: Corporate Payout and Financing Decisions During Covid-19

Back to all presentations

Outlasting the Pandemic: Corporate Payout and Financing Decisions During Covid-19

Time:
17:45h

The outbreak of the Covid-19 pandemic massively increased uncertainty about firms’ cash flows and access to financial markets. We examine its effect on firms’ strategies for preserving cash by suspending dividends and share repurchase programs and raising new funds through bond and equity issues. Our estimates suggest that between March and December 2020 US firms saved a combined $86bn by suspending or reducing dividend payments and another $140bn from suspending buybacks. We identify a short list of firm and stock characteristics that explain most of the cross-sectional variation in firms’ payout and financing decisions. We show that the expansive monetary policies pursued by the Federal Reserve in the early phase of the pandemic crucially affected the timing and sequencing of firms’ decisions. Announcement effects on stock returns were highly unusual during the pandemic as dividend and buyback suspensions were associated with a more rapid recovery in firms’ stock prices, consistent with investors interpreting them as prudent actions that helped reduce risks.

Authors: Davide Pettenuzzo, Riccardo Sabbatucci and Allan Timmermann

Speakers

Conference Documents

Back to all presentations

Discussant

Time:
18:00h

Speakers

Conference Documents

Back to all presentations

Closing Remarks

Time:
18:30h

Speakers