Corporations and Covid-19

A European Corporate Governance Institute (ECGI) Project

Corporations and Covid-19

  • 02 June 2022
  • Oxford

Watch the videos here

CORPORATIONS AND COVID-19 (2022)

 A European Corporate Governance Institute (ECGI) Project

 

This was a hybrid event. In-person attendance was limited to speakers and invited guests.

Thursday, 2 June 2022

09:00 – 16:00 BST | 10:00 - 17:00 CEST

Jesus College, University of Oxford

 

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

Organisers
Renée Adams (University of Oxford and ECGI)
Paola Sapienza (Kellogg School of Management and ECGI)

Supported by
Norges Bank Investment Management

PAPERS

The Impact of the Paycheck Protection Program on (Really) Small Businesses

(Allison Cole)

First Come, First Served: The Timing of Government Support and Its Impact on Firms

(Matthew Denes, Spyridon Lagaras, Margarita Tsoutsoura)

Firm Finances and the Spread of COVID-19: Evidence from Nursing Homes

(Daniel Weagley, Taylor Begley)

The Financial Fragility of For-profit Hospitals: Evidence from the COVID-19

(Ge Bai, Daniel Jiménez, Phillip Phan, Luis E. Quintero, Alessandro Rebucci, Xian Sun)

Why Did Small Business FinTech Lending Dry Up During the COVID-19 Crisis?

(Itzhak Ben-David, Mark Johnson, René Stulz)

Organizational capital and corporate resilience to workplace COVID-19 threat

(Jonathan Cohn, Lixiong Guo, Zhiyan Wang)

 

About this event

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), held an online workshop in 2021 and recently hosted a subsequent 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.
 

----------------------

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

-------------------------

Contact:

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

Administrative queries: admin@ecgi.org

Print Programme

We are no longer accepting submissions for the June 2022 conference.

------------------------

About ECGI

The ECGI is a 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.

Information

Address:
Jesus College, University of Oxford
Contact:
Elaine McPartlan
European Corporate Governance Institute (ECGI)

Thursday, 2 June 2022 | 09:00 BST (10:00 CEST)

Back to full programme

The Impact of the Paycheck Protection Program on (Really) Small Businesses

Time:
09:20h

Paper author: Allison Cole

This paper uses administrative data from a private payroll processor whose clients are primarily very small businesses (median 5 employees) to measure the effects of financial relief received through the Paycheck Protection Program (PPP). Firms that applied for PPP funds increased their average employment by 7.5% in the five months following the program’s launch relative to otherwise similar firms that did not apply. The positive effects on employment occur primarily in industries in which firms were less affected by government shut-downs or higher levels of COVID-19, namely industries with more employees that are able to work remotely, those that have fewer hourly workers and essential businesses. Novel data on hiring also shows that the program worked as intended by preserving employment matches: positive employment effects occurred due to fewer layoffs, not through more hiring of new or former employees. My estimates imply a cost of approximately $270,000 per job per year at small firms.

Speakers

Discussants

Conference Documents

Back to full programme

First Come, First Served: The Timing of Government Support and Its Impact on Firms

Time:
10:05h

Authors: Matthew Denes, Spyridon Lagaras, Margarita Tsoutsoura

We study the effects of deploying government capital to firms during crises. Using exogenous variation in the timing of disbursements in the Paycheck Protection Program (PPP), we find that firms receiving PPP loans later become more financially distressed and face reductions in credit supply. These effects are amplified for firms with heightened financial constraints. We also show that firms receiving loans later have lower economic activity using in-store activity and shutdowns. The results are consistent with a direct channel on firm operations and a financing channel. Overall, our findings highlight the role of timely and uninterrupted fiscal support during crises.

Speakers

Discussants

Conference Documents

10:50

Break

Back to full programme

Firm Finances and the Spread of COVID-19: Evidence from Nursing Homes

Time:
11:10h

Authors: Daniel Weagley, Taylor Begley

We find that firms’ financial resources play an important role in mitigating the spread of COVID-19. We study nursing homes – whose residents account for over one-third of all U.S. COVID-19 deaths – at a time when investment in risk mitigation was costly and critical. Facilities with less liquidity and those experiencing more severe cash flow shocks had a higher likelihood of COVID-19 reaching residents. These patterns are strongest for financially constrained facilities. We also find higher rates of transmission between staff and residents within liquidity-constrained facilities, which is consistent with these facilities creating a less-effective barrier between groups.

Speakers

Discussants

Conference Documents

Back to full programme

The Financial Fragility of For-profit Hospitals: Evidence from the COVID-19

Time:
11:55h

Authors: Ge Bai, Daniel Jiménez, Phillip Phan, Luis E. Quintero, Alessandro Rebucci, Xian Sun

 

We estimate the likelihood of financial distress of U.S. hospitals in 2020 due to the COVID19 pandemic using AHA Annual Survey data for 2011-2019 and smartphone mobility data for 2020. We find that while the average likelihood of distress across all hospitals is 28.53 % in 2020, slightly increasing from 2019, for-profit hospitals are much more likely to be distressed. Their average likelihood of financial distress is 39.13 %—a 6.93 percentage point increase from 2019. For-profit hospitals are the main providers of specialty health care services, such as psychiatric and acute long-term care, so their increased likelihood of distress poses a risk to service provision in these specialty areas, and particularly in rural communities. Our prediction model based on mobility data performs very well in sample against actual data and can potentially help policymakers and hospital administrators to monitor financial distress in real-time when case mixes change, or other large shocks materialize.

Speakers

Discussants

Conference Documents

12:40

Lunch

13:40

Keynote: Global Talent Trends and the Impact on the Future of Work

Speakers:
Back to full programme

Keynote: Global Talent Trends and the Impact on the Future of Work

Time:
13:40h

Speakers

Session 3

14:20

Why Did Small Business FinTech Lending Dry Up During the COVID-19 Crisis?

Speakers:
Discussant:
Back to full programme

Why Did Small Business FinTech Lending Dry Up During the COVID-19 Crisis?

Time:
14:20h

Authors: Itzhak Ben-David, Mark Johnson, René Stulz

We document how FinTech lending was affected by the first major crisis in its short history. Using detailed data about loan applications, offers, and take-up from a major small business FinTech credit platform, we find that while the number of loan applications increased sharply in early March 2020, the supply of credit collapsed as lenders dropped from the platform, so that the likelihood of applicants receiving loan offers fell precipitously. The funding model of FinTech lenders helps explain the drying up of the loan supply as lenders became financially constrained and lost their ability to fund new loans.

Speakers

Discussants

Conference Documents

15:05

Organizational capital and corporate resilience to workplace COVID-19 threat

Speakers:
Discussant:
Back to full programme

Organizational capital and corporate resilience to workplace COVID-19 threat

Time:
15:05h

Authors: Jonathan Cohn, Lixiong Guo, Zhiyan Wang

This paper investigates the effects of workplace safety practices on workplace COVID-19 infection rates and firm performance during the COVID-19 pandemic. Using novel establishment-level workplace COVID-19 infection data, we find that workplace COVID-19 infection rates are higher for establishments with higher pre-pandemic workplace injury rates, especially in industries where employees work in close physical proximity to each other. We find similar results for OSHA COVID-19 employee complaints. We also find that firms with higher pre-pandemic workplace injury rates experience lower stock returns in the period when it became apparent that COVID-19 would be a major issue for the U.S. and suffer greater declines in profitability and labor productivity in 2020. Our results suggest that firms with stronger workplace safety practices entering the pandemic are more resilient to the hazard posed by workplace COVID-19 infections.

Speakers

Discussants

Conference Documents

Back to full programme

Concluding Remarks

Time:
15:50h

Speakers

16:00

End of Session

19:00

Dinner

Speakers

Presentations

Back to all presentations

Welcome and Introduction

Time:
09:00h

Speakers

Back to all presentations

Session 1

Time:
02:17h

Speakers

Video: 

The Impact of the Paycheck Protection Program on (Really) Small Businesses

Back to all presentations

The Impact of the Paycheck Protection Program on (Really) Small Businesses

Time:
09:20h

Paper author: Allison Cole

This paper uses administrative data from a private payroll processor whose clients are primarily very small businesses (median 5 employees) to measure the effects of financial relief received through the Paycheck Protection Program (PPP). Firms that applied for PPP funds increased their average employment by 7.5% in the five months following the program’s launch relative to otherwise similar firms that did not apply. The positive effects on employment occur primarily in industries in which firms were less affected by government shut-downs or higher levels of COVID-19, namely industries with more employees that are able to work remotely, those that have fewer hourly workers and essential businesses. Novel data on hiring also shows that the program worked as intended by preserving employment matches: positive employment effects occurred due to fewer layoffs, not through more hiring of new or former employees. My estimates imply a cost of approximately $270,000 per job per year at small firms.

Speakers

Discussants

Conference Documents

Video: 

First Come, First Served: The Timing of Government Support and Its Impact on Firms

Back to all presentations

First Come, First Served: The Timing of Government Support and Its Impact on Firms

Time:
10:05h

Authors: Matthew Denes, Spyridon Lagaras, Margarita Tsoutsoura

We study the effects of deploying government capital to firms during crises. Using exogenous variation in the timing of disbursements in the Paycheck Protection Program (PPP), we find that firms receiving PPP loans later become more financially distressed and face reductions in credit supply. These effects are amplified for firms with heightened financial constraints. We also show that firms receiving loans later have lower economic activity using in-store activity and shutdowns. The results are consistent with a direct channel on firm operations and a financing channel. Overall, our findings highlight the role of timely and uninterrupted fiscal support during crises.

Speakers

Discussants

Conference Documents

Back to all presentations

Session 2

Time:
02:17h

Speakers

Video: 

Firm Finances and the Spread of COVID-19: Evidence from Nursing Homes

Back to all presentations

Firm Finances and the Spread of COVID-19: Evidence from Nursing Homes

Time:
11:10h

Authors: Daniel Weagley, Taylor Begley

We find that firms’ financial resources play an important role in mitigating the spread of COVID-19. We study nursing homes – whose residents account for over one-third of all U.S. COVID-19 deaths – at a time when investment in risk mitigation was costly and critical. Facilities with less liquidity and those experiencing more severe cash flow shocks had a higher likelihood of COVID-19 reaching residents. These patterns are strongest for financially constrained facilities. We also find higher rates of transmission between staff and residents within liquidity-constrained facilities, which is consistent with these facilities creating a less-effective barrier between groups.

Speakers

Discussants

Conference Documents

Video: 

The Financial Fragility of For-profit Hospitals: Evidence from the COVID-19

Back to all presentations

The Financial Fragility of For-profit Hospitals: Evidence from the COVID-19

Time:
11:55h

Authors: Ge Bai, Daniel Jiménez, Phillip Phan, Luis E. Quintero, Alessandro Rebucci, Xian Sun

 

We estimate the likelihood of financial distress of U.S. hospitals in 2020 due to the COVID19 pandemic using AHA Annual Survey data for 2011-2019 and smartphone mobility data for 2020. We find that while the average likelihood of distress across all hospitals is 28.53 % in 2020, slightly increasing from 2019, for-profit hospitals are much more likely to be distressed. Their average likelihood of financial distress is 39.13 %—a 6.93 percentage point increase from 2019. For-profit hospitals are the main providers of specialty health care services, such as psychiatric and acute long-term care, so their increased likelihood of distress poses a risk to service provision in these specialty areas, and particularly in rural communities. Our prediction model based on mobility data performs very well in sample against actual data and can potentially help policymakers and hospital administrators to monitor financial distress in real-time when case mixes change, or other large shocks materialize.

Speakers

Discussants

Conference Documents

Video: 

Keynote: Global Talent Trends and the Impact on the Future of Work

Back to all presentations

Keynote: Global Talent Trends and the Impact on the Future of Work

Time:
13:40h

Speakers

Session 3

Back to all presentations

Session 3

Time:
02:17h

Speakers

Video: 

Why Did Small Business FinTech Lending Dry Up During the COVID-19 Crisis?

Back to all presentations

Why Did Small Business FinTech Lending Dry Up During the COVID-19 Crisis?

Time:
14:20h

Authors: Itzhak Ben-David, Mark Johnson, René Stulz

We document how FinTech lending was affected by the first major crisis in its short history. Using detailed data about loan applications, offers, and take-up from a major small business FinTech credit platform, we find that while the number of loan applications increased sharply in early March 2020, the supply of credit collapsed as lenders dropped from the platform, so that the likelihood of applicants receiving loan offers fell precipitously. The funding model of FinTech lenders helps explain the drying up of the loan supply as lenders became financially constrained and lost their ability to fund new loans.

Speakers

Discussants

Conference Documents

Video: 

Organizational capital and corporate resilience to workplace COVID-19 threat

Back to all presentations

Organizational capital and corporate resilience to workplace COVID-19 threat

Time:
15:05h

Authors: Jonathan Cohn, Lixiong Guo, Zhiyan Wang

This paper investigates the effects of workplace safety practices on workplace COVID-19 infection rates and firm performance during the COVID-19 pandemic. Using novel establishment-level workplace COVID-19 infection data, we find that workplace COVID-19 infection rates are higher for establishments with higher pre-pandemic workplace injury rates, especially in industries where employees work in close physical proximity to each other. We find similar results for OSHA COVID-19 employee complaints. We also find that firms with higher pre-pandemic workplace injury rates experience lower stock returns in the period when it became apparent that COVID-19 would be a major issue for the U.S. and suffer greater declines in profitability and labor productivity in 2020. Our results suggest that firms with stronger workplace safety practices entering the pandemic are more resilient to the hazard posed by workplace COVID-19 infections.

Speakers

Discussants

Conference Documents

Back to all presentations

Concluding Remarks

Time:
15:50h

Speakers