In Good Company? COVID-19 Implications for the Digital Transformation of Firms

Part of the Lubar Research Seminar Series

Speaker: Maria Goranova, University of Wisconsin Milwaukee 

The COVID-19 pandemic lockdowns ushered companies into a future of digital transformation, irrespective of their level of preparedness for the challenges related to the office-less work. Scholars have pointed that digitalization, data aggregation, and connectivity would erode transaction costs and promote the emergence of self-driving corporations or even render firms obsolete. Using COVID-19 lockdowns as a quasi-natural experiment and studying granularity of foot traffic data, we examine the impact on CEO sentiment. While both CEO sentiment and employees’ online reviews are negatively affected by the COVID-19 mobility restrictions, the effect on CEO sentiment is not driven by local COVID-19 infection rates, business disruptions, or operational uncertainty. It is also robust to an identification test exploiting the implementation of stay-at-home orders across the United States using stacked regression approach.