Publication: Do Markets Price CEOs Health Hazards? Evidence from the COVID-19 Pandemic
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Date
2023-01-20
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World Scientific
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Abstract
We find evidence that markets anticipate the potential loss of firm value in the event of the CEO falling sick and eventually dying of COVID-19 in a sample of almost 3000 listed firms from across 137 regions in 10 European countries. First, we use soccer games as “super-spreader” events. The instrumented number of infected cases per capita in the region where company headquarters are located predicts a significant drop in stock returns during March and April 2020 for firms managed by CEOs with a higher probability of dying from COVID-19. Second, we show that the stock price of these firms increases significantly the day on which positive news on the development of COVID-19 vaccines are released in the market.
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Attribution 4,0 International
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IE Business School
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Gómez, J. P., & Mironov, M. (2022). Do Markets Price CEOs Health Hazards? Evidence from the COVID-19 Pandemic. The Quarterly Journal of Finance, 12(04), 2250015. https://doi.org/10.1142/S201013922250015X