Working Remotely and the Supply-Side Impact of COVID-19
Name
SSRN-id3615334.pdf
Description
Submitted version
Size
2.18 MB
Format
Adobe PDF
Checksum (MD5)
49d1809cdfeef951d2f3fbe7153960c8
Author(s)
Papanikolaou, Dimitris
Schmidt, Lawrence DW
Date Issued
2022
Journal
The Review of Asset Pricing Studies
Publisher
Oxford University Press (OUP)
Citation
Papanikolaou, Dimitris and Schmidt, Lawrence DW. 2022. "Working Remotely and the Supply-Side Impact of COVID-19." The Review of Asset Pricing Studies, 12 (1).
Version
Original manuscript
Abstract
Abstract
We analyze the supply-side disruptions associated with COVID-19. We find that sectors in which a higher fraction of the workforce is not able to work remotely experienced greater declines in employment and expected revenue growth, worse stock market performance, and higher likelihood of default. The stock market overweights low-exposure industries. Thus, our findings cast light on the disconnect between stock market indices and aggregate outcomes. We combine these ex ante heterogeneous industry exposures with daily financial market data to create a stock return portfolio that tracks news about the supply-side disruptions resulting from the pandemic. (JEL G12, D22, H25, J20, E00)
We analyze the supply-side disruptions associated with COVID-19. We find that sectors in which a higher fraction of the workforce is not able to work remotely experienced greater declines in employment and expected revenue growth, worse stock market performance, and higher likelihood of default. The stock market overweights low-exposure industries. Thus, our findings cast light on the disconnect between stock market indices and aggregate outcomes. We combine these ex ante heterogeneous industry exposures with daily financial market data to create a stock return portfolio that tracks news about the supply-side disruptions resulting from the pandemic. (JEL G12, D22, H25, J20, E00)
MIT Department
Sloan School of Management
Terms of Use
Creative Commons Attribution-Noncommercial-Share Alike
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DOI of Published Version
https://doi.org/10.1093/RAPSTU/RAAB026
