Working from Home, Managerial Sentiment, and Corporate Policies during COVID-19

61 Pages Posted: 30 Apr 2021 Last revised: 4 Jun 2021

See all articles by Lilian Ng

Lilian Ng

Schulich School of Business, York University; European Corporate Governance Institute (ECGI)

Jing Yu

The University of Sydney; Financial Research Network (FIRN)

Linyang Yu

York University - Schulich School of Business

Date Written: June 1, 2021

Abstract

COVID-19 lockdowns and stay-at-home orders have forced many individuals to work from home and led to diverse isolation-induced mental health problems, including depression, stress, and pessimism biases. Using the granularity of foot traffic data during the 2020 pandemic year, we show that social isolation when working from home has strong negative effects on managerial sentiment. The evidence is robust to the identification strategy exploiting the staggered implementation of stay-at-home orders across the United States and alternative measures of managerial sentiment. Further analysis suggests that the COVID-19 isolation-induced managerial sentiment plays a role in corporate policies – homebound managers tend to adopt conservative corporate policies.

Keywords: COVID-19 Isolation, Work from Home, Pessimism Biases, Managerial Sentiment, Corporate Policy

JEL Classification: G3, G4, G14, I18

Suggested Citation

Ng, Lilian and Yu, Jing and Yu, Linyang, Working from Home, Managerial Sentiment, and Corporate Policies during COVID-19 (June 1, 2021). Available at SSRN: https://ssrn.com/abstract=3837134 or http://dx.doi.org/10.2139/ssrn.3837134

Lilian Ng

Schulich School of Business, York University ( email )

N223, Seymour Schulich Building
4700 Keele Street
Toronto, Ontario ON M3J 1P3
Canada
+1.416.736.2100 x77994 (Phone)

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Jing Yu (Contact Author)

The University of Sydney ( email )

University of Sydney
Sydney, NSW 2006
Australia

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

Linyang Yu

York University - Schulich School of Business ( email )

4700 Keele Street
Toronto, Ontario M3J 1P3
Canada

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