Corporate governance and stock performance: the case of COVID-19 crisis

Yu-Lin Hsu, Li-Kai Liao

Research output: Contribution to journalArticlepeer-review

Abstract

This paper analyzes the impact of COVID-19 on firm-level stock behaviors (including stock price volatility, trading volume and stock returns). Using US data, this paper examines whether confirmed cases (and deaths) of COVID-19 or COVID-19-associated online searches affect stock behaviors. The results show that our five COVID-19 proxies are all positively associated with stock price volatility and trading volume and negatively associated with stock returns. This paper further investigates the mitigating effect of corporate governance (viz., board and ownership structures) in this COVID-19 crisis. Overall, the results suggest that good corporate governance can mitigate the impact of COVID-19 on stock price volatility and trading volume but may not help to enhance stock returns. This paper also considers key policies used to tackle the COVID-19 pandemic and finds that government intervention plays an important role in stabilizing stock markets in this COVID-19 crisis.
Original languageEnglish
JournalJournal of Accounting and Public Policy
Early online date11 Nov 2021
DOIs
Publication statusE-pub ahead of print - 11 Nov 2021

Keywords

  • COVID-19
  • corporate governance
  • online searches
  • price volatility
  • stock returns
  • CARES Act

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