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COVID-19 Vaccinations, Business Activity, and Firm Value

Published online by Cambridge University Press:  15 April 2024

John M. Bizjak ,
Swaminathan L. Kalpathy Open the ORCID record for Swaminathan L. Kalpathy [Opens in a new window] ,
Vassil T. Mihov  and
Jue Ren
John M. Bizjak
Affiliation:
Texas Christian University Neeley School of Business j.bizjak@tcu.edu
Swaminathan L. Kalpathy*
Affiliation:
Texas Christian University Neeley School of Business
Vassil T. Mihov
Affiliation:
Texas Christian University Neeley School of Business v.mihov@tcu.edu
Jue Ren
Affiliation:
Texas Christian University Neeley School of Business jue.ren@tcu.edu
*
s.kalpathy@tcu.edu (corresponding author)
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Abstract

Using establishment-level data, we show that COVID-19 vaccinations boost business activity and firm performance in the United States. A 10-percent increase in vaccination rates results in a 4-percent to 6-percent increase in customer visits. We document the channels through which vaccinations increase store visits and the limits to the effect of vaccines on business activity. At the firm level, vaccinations increase sales and earnings, impact expansion decisions, and decrease probability of default, but the benefits vary across businesses. Vaccinations create private economic benefits to firms, shareholders, and employees, in addition to their intended public health benefits.

Type
Research Article
Information
Journal of Financial and Quantitative Analysis , First View , pp. 1 - 29
Copyright
© The Author(s), 2024. Published by Cambridge University Press on behalf of the Michael G. Foster School of Business, University of Washington

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Footnotes

We thank an anonymous referee, Vishal Ahuja, Vladimir Atanasov, Shaen Corbet, David Dicks, Stuart Gillan, Umit Gurun, Jarrad Harford (the editor), Mark Houston, Paul Irvine, Darius Miller, Tarun Patel, Mahesh Subramony, Neven Valev, Kumar Venkataraman, James Weston, Feng Zhang, the participants at the NBER Longer-Term Health and Economic Effects of COVID-19 Conference, Lone Star Finance Symposium, the Inaugural Colloquium on Financial Economics at Sofia University, Boca Corporate Finance and Governance Conference, Dewey Research Seminar Series, IFABS Conference at Oxford University, Auburn University, Baylor University, Georgia State University, SMU-TCU joint seminar, and UNT seminar for their constructive comments and suggestions. We thank Dewey for generously providing the SafeGraph data on store traffic and Evan Barry for his help with the data. Bizjak acknowledges research support from the Robert and Maria Lowdon Chair in Business Administration. Mihov acknowledges research support from the LKCM Center for Financial Studies and the Beasley Fellowship.

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