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Does sustainable competitive advantage make a difference in stock performance during the Covid-19 pandemic?

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  • Yu, Huaibing

Abstract

Although firms with sustainable competitive advantage do not yield superior returns in regular years, these firms significantly outperform others during the Covid-19 pandemic. Empirical evidence shows that wide-moat is positively priced by the stock market during the pandemic, which is not the case in the pre-pandemic period. Furthermore, wide-moat firms can generate positive cumulative abnormal returns after the advent of the Covid-19 pandemic. However, the magnitude wanes down as time expands into the future.

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  • Yu, Huaibing, 2022. "Does sustainable competitive advantage make a difference in stock performance during the Covid-19 pandemic?," Finance Research Letters, Elsevier, vol. 48(C).
    • Handle: RePEc:eee:finlet:v:48:y:2022:i:c:s1544612322001751
    DOI: 10.1016/j.frl.2022.102893
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    1. Teti, Emanuele & Dallocchio, Maurizio & L'Erario, Giulio, 2023. "The impact of ESG tilting on the performance of stock portfolios in times of crisis," Finance Research Letters, Elsevier, vol. 52(C).
    2. Lashkaripour, Mohammadhossein, 2023. "ESG tail risk: The Covid-19 market crash analysis," Finance Research Letters, Elsevier, vol. 53(C).

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