The role of ESG performance in firms' resilience during the COVID-19 pandemic: Evidence from Nordic firms




Habeeb Yahya

Publisher Elsevier [Commercial Publisher]

2023

Global Finance Journal

GFJ

100905

58

1873-5665

DOIhttps://doi.org/10.1016/j.gfj.2023.100905(external)

https://doi.org/10.1016/j.gfj.2023.100905(external)

https://research.utu.fi/converis/portal/detail/Publication/181590813(external)



Firms' corporate social responsibility and environmental sustainability issues have been documented to provide a competitive advantage that enhances financial performance, especially in tightened economic situations. Similarly, studies on countries' economic performance during the COVID-19 pandemic show a significant effect of movement restriction (lockdown) as a spread-containment strategy. This paper analyses the exogenous effect of lockdown on firm performance during the COVID-19 pandemic and the role of firms' sustainability in resilience to the pandemic. This study uses a difference-in-differences analysis on data of publicly listed Nordic firms, showing a positive and significant difference in revenue and profitability for firms listed in lockdown countries compared with those in the country without a lockdown. Further analysis shows that sustainability provides resilience for firms during the COVID-19 pandemic, as firms' environmental and social performances are positively related to revenue, profitability, and valuation. This finding supports the conclusion that customer and investor preferences enhance sustainable firms' performance.


Last updated on 2025-27-03 at 22:01