Resilience in service firms: the impact of social capital on firm performance during turmoil
Marketing Intelligence & Planning
ISSN: 0263-4503
Article publication date: 23 August 2023
Issue publication date: 11 October 2023
Abstract
Purpose
This study aims to examine whether social capital contributes to service firms' resilience during crisis.
Design/methodology/approach
This study measures social capital via environmental and social (ES) ratings and firm performance via buy-and-hold-abnormal returns derived from Refinitiv ESG and CRSP databases. Using a sample of 404 US service firms, this study runs cross-sectional regressions to estimate the effect of social capital on service firms' crisis returns.
Findings
This study finds that high-social capital service firms outperformed in the first quarter of 2020. The crisis response is heterogeneous among service sub-sectors and diverges (i.e. calming or deepening) over time depending on social capital. Service sub-sector analysis notably posits that social capital impact is positively related to returns of Health- and Business Services and firms with utilitarian nature. The study also indicates that ES commitments targeting internal stakeholders contribute more to resilience. Overall, social capital might be a relevant value driver, generate real impact and provide insurance-like protection for service firms during turmoil.
Originality/value
The service industry is one of the most severely hit industries during COVID-19. However, there is limited knowledge about whether and when social capital creates value in the service industry during crises. This study makes two main contributions: first, it extends to the continuous efforts toward the role of social capital in firm performance, and second, it provides important insights related to the resilience search for service firms.
Keywords
Acknowledgements
The authors would like to thank the Editor in Chief, Dr Babu John-Mariadoss, and as two anonymous reviewers for their helpful comments and suggestions.
Citation
Ergen Keleş, F.H. and Keleş, E. (2023), "Resilience in service firms: the impact of social capital on firm performance during turmoil", Marketing Intelligence & Planning, Vol. 41 No. 7, pp. 970-991. https://doi.org/10.1108/MIP-04-2023-0156
Publisher
:Emerald Publishing Limited
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