The blame game: COVID-19 crisis and financial performance

Rayenda Khresna Brahmana; Doddy Setiawan; Maria Kontesa

doi:10.1007/s43546-022-00352-w

The blame game: COVID-19 crisis and financial performance

SN Bus Econ. 2022;2(11):173. doi: 10.1007/s43546-022-00352-w. Epub 2022 Oct 15.

Authors

Rayenda Khresna Brahmana¹, Doddy Setiawan², Maria Kontesa³

Affiliations

¹ College of Business Administration, University of Bahrain, Sakhir, Kingdom of Bahrain.
² Faculty of Economics and Business, Universitas Sebelas Maret, Surakarta, 57126 Central Java Indonesia.
³ Faculty of Economics and Business, Universitas Widya Dharma Pontianak, Pontianak, 78243 West Kalimantan Indonesia.

Abstract

This research investigates the manager's impression management during the COVID-19 pandemic by gauging the agency theory framework. We examine how managers blame COVID-19 when the firms experience declining performance to retain their reputation. Overall, our results indicate that those firms with declining performance will blame COVID-19 compared to those with expected performance. It also indicates that the odds of COVID-19 appearing in the financial report will be higher in the declining performance firms. Our analysis confirms the impression management theory and agency theory by suggesting that, under declining performance, managers blame COVID-19 as the justifications to alter the attention from their incapability to the black swan event.

Supplementary information: The online version contains supplementary material available at 10.1007/s43546-022-00352-w.

Keywords: Agency problems; Blame game; COVID-19; Financial performance; Impression management.

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