The impact of governmental COVID‐19 measures on manufacturers' stock market valuations: The role of labor intensity and operational slack

• DOI: 10.1002/joom.1207
• Publication Date: 2022-08-22T03:39:32Z
• Authors: Lujie Chen; Taiyu Li; Fu Jia; Tobias Schoenherr
• Keywords: Stock (firearms); Safety stock

Abstract This study investigates the impact of Chinese government's Level I emergency response policy on manufacturers' stock market values. We empirically examine roles human resource dependence (labor intensity) and operational slack within context supply chain resilience. Through an event 1357 manufacturing companies, we find that triggered statistically significant positive abnormal returns for manufacturers. However, also there exists a negative manufacturers are labor‐intensive, giving rise to arguments based in theory. In addition, results indicate role played by (e.g., financial inventory slack) helping maintain operations business continuity, effectively mitigating risks adding With these findings, contribute management calling attention importance redundancy while at same time identifying as resilience strategies were able mitigate pandemic‐related risks.