COVID-19 in emerging markets: firm-survey evidence
with Thorsten Beck (City’s Business School) and Burton Flynn (City’s Business School)
Using survey responses across nearly 500 listed firms in 10 emerging markets from early April, we find the vast majority of firms were negatively affected by COVID-19. Firms reacted by reducing investment rather than payroll. There is a surprising degree of support vis-à-vis employees, customers, other stakeholders and broader society. Although stock prices initially reacted to the impact of the crisis, delayed stock price reactions suggest evidence of inefficient markets. Furthermore, we find evidence that stakeholder-centric firms experienced lower stock price declines during the crisis drawdown.
Paper – CEPR COVID Economics