Did best employee rating companies outperform their peers during the pandemic?

Abstract

This dissertation builds on Edmans (2011) and Boustanifar and Kang (2021) to examine whether companies included in the “100 Best Companies to Work For in America” outperformed their peers during the COVID-19 pandemic. Using an extended sample from 2017 to 2023, an equally-weighted and value-weighted long-only portfolio are constructed based on employee satisfaction as a proxy for corporate culture. During the pandemic, the value-weighted portfolio earns significant abnormal returns, with monthly alphas up to 1.7%, robust across the Carhart four-factor and Fama-French five-factor models. A difference-in-differences approach confirms that these firms significantly outperformed their peers from March 2020 to January 2023. These results are robust to multiple benchmarks and controls, suggesting that employee satisfaction enhances corporate resilience and shareholder value during systemic crises. Therefore, human capital quality emerges as a financially material intangible for investors and firms alike.

Date of Award	23 Jun 2025
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Tural Karimli (Supervisor)