Organizational capital and corporate resilience to workplace COVID-19 threat

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.