Covid-19 Econometric Impacts- Immediate Shocks, Resilient Performance and Confounding Management Choices

This paper examines the earliest evidence of the Covid-19 pandemic's impact on corporate results. We study the cross-sectional dispersion of corporate revenue and other performance impacts attributed to the pandemic as of the first quarter of 2020. The early business reports on this were mostly accessible through the business press or piecemeal corporate announcements. Market sentiment emerged that associated the spate of individual corporate news items with market-wide steep price declines. The Dow Jones' Index spiked downward, for example, and this was likened to a harbinger of a pandemic-induced crash. The sample is a random selection of public American SEC registrants. Our data is drawn from financial statements they filed with the SEC a short time after those early, informal reports. We examine the notion that the pandemic's immediate impact on revenue across the market in that first quarter of 2020 was pervasive and uniform. The research tracks revenue through to earnings and return on equity (ROE). We test the hypothesis that revenue changes are systematically correlated with a similar change in ROE. We also test the hypothesis that management acted to offset the reporting impacts of the pandemic at this early stage of it. We demonstrate greater cross-sectional diversity in the pandemic's impacts than reported. We demonstrate that revenue changes do not map into similarly systematic earnings and ROE changes. We continue our research into how the pandemic impacts corporate performance beyond these first financials.

Managerial Trustworthiness and Buybacks

CEO trustworthiness is positively related to long-term excess returns after buyback announcements. When the Chief Executive Officer (CEO) is trustworthy, statements that the stock is undervalued are more credible. CEO trustworthiness is initially measured by the extent to which people in the county where the company headquarters is located trust each other. Further, the positive impact of trustworthiness on excess returns is higher when the CEO has been a long-term resident of a high-trust county, and correspondingly, trustworthy CEOs are less likely to be accused of financial misreporting. Our conclusions are confirmed when we use alternative measures of trustworthiness such as employee trust and CEO integrity.

Do ADR Firms Have Different Dividend Policies Than U.S. Firms? A Comparative Study

This paper examines and compares the dividend policies of American depository receipt (ADR) firms and U.S. firms and identifies the factors that determine these policies for both types of companies. We find that ADR firms have higher dividend yields than U.S. firms, while U.S. firms have higher stock repurchase ratios than ADR firms. Results from univariate comparisons and multivariate analysis show that the determining factors of dividend payout and stock repurchases differ between these two types of firms. This finding holds for the robustness check conducted in this study. This paper provides further evidence regarding dividend policies of ADR firms and sheds light on the differences in dividend policies between non-U.S. firm and U.S. firms.