Corporate immunity, national culture and stock returns: Startups amid the COVID-19 pandemic

Small and medium-sized firms, particularly startups, are highly vulnerable to the COVID-19 pandemic because of their financial instability. Using a sample of listed startups across four countries, we investigate whether a startup's built-up capacity pre-COVID-19 can stimulate corporate immunity to endure the impact of the COVID-19 pandemic, reflected via stock performance. We find that the increase in the accumulated COVID-19 confirmed cases worsens stock returns and that the negative effect is alleviated if startups are greater in size as well as have low debt, large board size and CEO duality. Moreover, national cultural dimensions significantly moderate the relationship between stock returns and COVID-19. The COVID-19 negative impact is relieved in societies where people are more collectivistic and cooperative, less tolerant towards uncertainty, and more long-term oriented. Overall, our results support the consolidation of corporate capacities and suggest policymakers consider national culture when formulating COVID-19 or similar infectious pandemic strategies

Does the second wave of COVID-19 undermine corporate immunity? International evidence

Purpose - This study compares the impact of the COVID-19 pandemic on stock returns in the first two waves of infection across selected markets, given built-in corporate immunity before the global outbreak. Design/methodology/approach - The data are collected from listed firms in five markets that have experienced the second wave of COVID-19 contagion, namely the United States (US), Australia, China, Hong Kong and South Korea. The period of investigation in this study ranges from January 24 to August 28, 2020 to cover the first two COVID-19 waves in selected markets. The study estimates the research model by employing the ordinary least square method with fixed effects to control for the heterogeneity that may confound the empirical outcomes. Findings - The analysis reveals that firms with larger size and more cash reserves before the COVID-19 outbreak have better stock performance under the first wave; however, these advantages impede stock resilience during the second wave. Corporate governance practices significantly influence stock returns only in the first wave as their effects fade when the second wave emerges. The results also suggest that in economies with greater power distance, although stock price depreciation was milder in the first wave, it is more intense when new cases again surge after the first wave was contained. Practical implications - This paper provides practical implications for corporate managers, policymakers and governments concerning crisis management strategies for COVID-19 and future pandemics. Originality/value - This study is the first to evaluate built-in corporate immunity before the COVID-19 shock under successive contagious waves. Besides, this study accentuates the importance of cultural understanding in weathering the ongoing pandemic across different markets

How do banks manage their capital during uncertainty?

The paper investigates the impact of EPU on bank capital in the U.S. from 2001–2020. The empirical results show that banks hold more capital when encountering high EPU. This effect increases with the bank size, meaning that the larger banks hold more capital during increasing EPU. Interestingly, further analyses reveal that worst-capitalized banks decrease their capital ratio when EPU elevates. The results are robust under different econometric methods and alternative proxies of uncertainty and bank capital

Migration and persistence of human influenza A viruses, Vietnam, 2001-2008.

Understanding global influenza migration and persistence is crucial for vaccine strain selection. Using 240 new human influenza A virus whole genomes collected in Vietnam during 2001-2008, we looked for persistence patterns and migratory connections between Vietnam and other countries. We found that viruses in Vietnam migrate to and from China, Hong Kong, Taiwan, Cambodia, Japan, South Korea, and the United States. We attempted to reduce geographic bias by generating phylogenies subsampled at the year and country levels. However, migration events in these phylogenies were still driven by the presence or absence of sequence data, indicating that an epidemiologic study design that controls for prevalence is required for robust migration analysis. With whole-genome data, most migration events are not detectable from the phylogeny of the hemagglutinin segment alone, although general migratory relationships between Vietnam and other countries are visible in the hemagglutinin phylogeny. It is possible that virus lineages in Vietnam persisted for >1 year