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

Document Type

Article

Publication Date

8-1-2022

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.

Publication Title

Finance Research Letters

DOI

10.1016/j.frl.2022.102893

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