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COVID-19 exposure: a risk-averse firms’ response

Mohammad Nasih (Department of Accounting, Faculty of Economic and Business, Universitas Airlangga, Surabaya, Indonesia and Center for Environmental, Social, and Governance Studies, Universitas Airlangga, Surabaya, Indonesia)
Damara Ardelia Kusuma Wardani (Department of Accounting, Faculty of Economic and Business, Universitas Airlangga, Surabaya, Indonesia and Center for Environmental, Social, and Governance Studies, Universitas Airlangga, Surabaya, Indonesia)
Iman Harymawan (Department of Accounting, Faculty of Economic and Business, Universitas Airlangga, Surabaya, Indonesia and Center for Environmental, Social, and Governance Studies, Universitas Airlangga, Surabaya, Indonesia)
Fajar Kristanto Gautama Putra (Department of Accounting, Faculty of Economic and Business, Universitas Airlangga, Surabaya, Indonesia and Center for Environmental, Social, and Governance Studies, Universitas Airlangga, Surabaya, Indonesia)
Adel Sarea (Department of Accounting and Economics, Ahlia University, Manama, Bahrain)

Journal of Financial Reporting and Accounting

ISSN: 1985-2517

Article publication date: 10 August 2022

370

Abstract

Purpose

Without a doubt, COVID-19 is a disruptive event that one may not consider before it becomes a global pandemic. This study aims to examine the firm’s risk preference, represented as board characteristics towards COVID-19 exposure in Indonesia.

Design/methodology/approach

This study uses the boardroom’s average value of board age and female proportion to represent board characteristics. Fixed-effect regression based on industry (Industry FE) and year (Year FE) analyses 861 firm-year observations of all firms listed on the Indonesian Stock Exchange in 2019–2020.

Findings

The result shows a positive relationship between the female board and COVID-19 exposure disclosure. Meanwhile, the age proportion does not offer a significant result. The additional analysis document that the directors mainly drove the result and were only relevant during 2020. These results are robust due to coarsened exact matching tests and Heckman’s two-stage regression. This study enriches COVID-19 literature, especially from a quantitative perspective.

Originality/value

The rise of global crises makes the outputs of this study important for non-financial listed firms in Indonesia.

Keywords

Acknowledgements

Funding: The authors appreciate financial support from Direktorat Riset dan Pengabdian Masyarakat, Deputi Bidang Penguatan Riset dan Pengembangan Kementerian Riset dan Teknologi/Badan Riset dan Inovasi Nasional.

The authors are grateful for insightful comments from the editor (Prof. Khaled Hussainey), Associate Editor (Dr Effiezal Aswadi Abdul Wahab) and two anonymous reviewers.

Conflicts of interest: The authors declare no potential conflict of interest concerning this study’s research, authorship and publication.

Citation

Nasih, M., Wardani, D.A.K., Harymawan, I., Putra, F.K.G. and Sarea, A. (2022), "COVID-19 exposure: a risk-averse firms’ response", Journal of Financial Reporting and Accounting, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JFRA-12-2021-0430

Publisher

:

Emerald Publishing Limited

Copyright © 2022, Emerald Publishing Limited

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