When bigger isn’t better: UK firms’ equity price performance during the Covid-19 pandemic

Tommaso Aquilante, David Bholat, Andreas Joseph, Riccardo M Masolo, Tim Munday and David van Dijcke

Background

Covid-19 (Covid) has had heterogeneous effects on different groups of people. For example, it’s had larger negative impacts on contact-intense occupations (Leibovici, Santacreu and Famiglietti (2020)), low wage earners (Joyce and Xu (2020)) and low-income households (Surico, Känzig and Hacioglu (2020) and Chetty et al (2020)). In this blog, we show that UK listed firms have been heterogeneously impacted too (compare Hassan et al (2020); Griffith, Levell and Stroud (2020)). Surprisingly, small firms’ stock prices have been more resilient on average. Or, to put it differently, being bigger hasn’t been better for firms during the pandemic. However, being big with a modern tilt towards intangibles turned out to be beneficial too.

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