Original Research - Special Collection: Wars and pandemics economic and financial consequences

The impact of COVID-19 on company performance per industry sector: Evidence from South Africa

Kugin Muthu, Nicolene Wesson
Journal of Economic and Financial Sciences | Vol 16, No 1 | a801 | DOI: https://doi.org/10.4102/jef.v16i1.801 | © 2023 Kugin Muthu, Nicolene Wesson | This work is licensed under CC Attribution 4.0
Submitted: 30 June 2022 | Published: 30 January 2023

About the author(s)

Kugin Muthu, University of Stellenbosch Business School, Faculty of Economic and Management Sciences, Stellenbosch University, Cape Town, South Africa
Nicolene Wesson, University of Stellenbosch Business School, Faculty of Economic and Management Sciences, Stellenbosch University, Cape Town, South Africa

Abstract

Orientation: Governments across the world have adopted a variety of preventative measures to curb the spread of the coronavirus disease 2019 (COVID-19). The full socioeconomic costs present a significant threat to economic growth, with developing economies such as South Africa predicted to be the worst affected.

Research purpose: This study assessed the impact of COVID-19 on company performance based on the various industry sectors of the Johannesburg Securities Exchange (JSE) of South Africa.

Motivation for the study: The study builds on the growing body of knowledge on the impact of COVID-19 on company performance in a South African context.

Research approach and method: All JSE-listed companies were analysed for the period 2014–2020. Descriptive statistics and regression analyses were applied to assess the impact of COVID-19 on company performance per industry sector and to identify the mechanisms through which company performance was affected during the pandemic year.

Main findings: Company performance per JSE industry sector suffered a significant negative impact during the 2020 pandemic year. Sectors were affected differently owing to the idiosyncratic nature of each industry. Cash-flow-related variables significantly affected company performance during the pandemic year.

Practical implications: A healthy cash flow is paramount in times of crisis. Investors and other stakeholders should be cognisant of how industry sector idiosyncrasies affect company performance during crises.

Contribution: Results may provide insights into the effect of COVID-19 on company performance per industry sector in South Africa, to support the mitigation of the negative consequences of COVID-19 and future crises or pandemics.


Keywords

company performance; COVID-19; industry sectors; JSE-listed companies; South Africa

Metrics

Total abstract views: 1889
Total article views: 3562

 

Crossref Citations

1. Sectoral Performance Trends and Differences in the Balkan and Eastern European Region
Tamás Kristóf, Attila Virág, Miklós Virág
Economies  vol: 12  issue: 4  first page: 87  year: 2024  
doi: 10.3390/economies12040087