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Firm-Level Exposure to Epidemic Diseases: Covid-19, SARS, and H1N1

Subject

Accounting

Publishing details

Institute for New Economic Thinking Working Paper Series

Authors / Editors

Hassan T A;Hollander S;van Lent L;Tahoun A

Biographies

Publication Year

2020

Abstract

Using tools described in our earlier work (Hassan et al., 2019, 2020), we develop text-based measures of the costs, benefits, and risks listed firms in the US and over 80 other countries associate with the spread of Covid-19 and other epidemic diseases. We identify which firms expect to gain or lose from an epidemic disease and which are most affected by the associated uncertainty as a disease spreads in a region or around the world. As Covid-19 spreads globally in the first quarter of 2020, we find that firms’ primary concerns relate to the collapse of demand, increased uncertainty, and disruption in supply chains. Other important concerns relate to capacity reductions, closures, and employee welfare. By contrast, financing concerns are mentioned relatively rarely. We also identify some firms that foresee opportunities in new or disrupted markets due to the spread of the disease. Finally, we find some evidence that firms that have experience with SARS or H1N1 have more positive expectations about their ability to deal with the coronavirus outbreak.

Keywords

Epidemic diseases; pandemic; exposure; virus; firms; uncertainty; sentiment; machine learning

Publication Notes

The data set described in this paper is publicly available on www.firmlevelrisk.com.

Series Number

119

Series

Institute for New Economic Thinking Working Paper Series

Available on ECCH

No


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