Determinants and consequences of COVID-19 vaccine mandates

The COVID-19 pandemic brought unprecedented challenges to firms’ operating environments, prompting some firms to adopt COVID-19 vaccine mandates for employees. In this study, we examine the determinants and firm performance consequences of adoption of a COVID-19 vaccine mandate. We find that, relative to non-mandate firms, mandate firms have less conservative (i.e., less Republican-leaning) CEOs and have more powerful CEOs. We also find that mandate firms have more resources and have higher exposure to risk of spread of the virus among employees than non-mandate firms. Additionally, firms in sectors most economically harmed by the lockdowns during the pandemic (e.g., leisure, travel, entertainment) and firms in the pharmaceutical industry are more likely than other firms to adopt a vaccine mandate. In addition, we document that vaccine mandates are associated with beneficial firm performance outcomes, including financial performance, growth potential, and stock returns. These results suggest that vaccine mandates during the COVID-19 pandemic allowed firms to economically recover from the pandemic faster.