COVID-19, Product Selection, and The Performance of Pharmaceutical Enterprises: Evidence from China

Abstract

Since the worldwide outbreak of COVID-19, enterprises all the world have suffered from a crisis, which both threats human health and impacts production activities. Due to the particularity of listed companies in the pharmaceutical industry up against COVID-19, this study evaluates how COVID-19 affects the financial performance of pharmaceutical companies and the influential factors of the performance differentiation. Our research shows that COVID-19 leads to a decline in the performance of listed companies in the pharmaceutical industry. However, the impacts vary because of different domains of main products, among which the impact on listed companies producing commodities related to epidemic prevention and control such as vaccines and masks shows the least significant. In addition to the factors of listed companies themselves, we also find that companies located in less economically advantaged and less densely populated areas are slightly less impacted. According to the research results, policymakers should consider strengthening the financial supervision of enterprises and paying attention to the implementation of public health work. Moreover, business managers should choose suitable domains of main products and key development areas to reduce the negative impact of potential economic recession.