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Are small waves fondle and big waves overturn? Market reaction and corporate governance during four COVID-19 waves

Imen Khanchel (Higher School of Commerce of Tunis, University of Manouba, Manouba, Tunisia)
Naima Lassoued (Higher School of Commerce of Tunis, University of Manouba, Manouba, Tunisia)

Review of Behavioral Finance

ISSN: 1940-5979

Article publication date: 18 August 2023

Issue publication date: 5 March 2024

107

Abstract

Purpose

This study examines the effects of corporate governance on market returns during the first four waves of the COVID-19 crisis.

Design/methodology/approach

Event study and linear regression methods were applied on a sample of 293 US firms.

Findings

The results show that differences in abnormal returns are more significant during the second wave of COVID-19 and the two following waves. Moreover, estimations show that good corporate governance alleviated the effect of COVID-19 during the second wave and the two following waves. However, corporate governance did not affect abnormal returns during the first wave. Furthermore, evidence highlights that the effect of corporate governance is more observed in the industries most affected by COVID-19 than in the least affected industries.

Originality/value

Many studies have attempted to investigate the effect of corporate governance on stock returns during the first wave of the pandemic. However, to the authors' knowledge, this is the first study that focuses on different waves that occurred during 2020 and 2021.

Keywords

Acknowledgements

Since acceptance of this article, the following author(s) have updated their affiliation(s): Imen Khanchel is at the LARIME LR11ES02, ESSECT, University of Tunis, Tunis, Tunisia and Naima Lassoued is at the QUARG UR17ES26, ESCT, Manouba University, Manouba, Tunisia.

Citation

Khanchel, I. and Lassoued, N. (2024), "Are small waves fondle and big waves overturn? Market reaction and corporate governance during four COVID-19 waves", Review of Behavioral Finance, Vol. 16 No. 2, pp. 300-321. https://doi.org/10.1108/RBF-02-2023-0054

Publisher

:

Emerald Publishing Limited

Copyright © 2023, Emerald Publishing Limited

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