Are small waves fondle and big waves overturn? Market reaction and corporate governance during four COVID-19 waves

PurposeThis study examines the effects of corporate governance on market returns during the first four waves of the COVID-19 crisis.Design/methodology/approachEvent study and linear regression methods were applied on a sample of 293 US firms.FindingsThe results show that differences in abnormal returns are more significant during the second wave of COVID-19 and the two following waves. Moreover, estimations show that good corporate governance alleviated the effect of COVID-19 during the second wave and the two following waves. However, corporate governance did not affect abnormal returns during the first wave. Furthermore, evidence highlights that the effect of corporate governance is more observed in the industries most affected by COVID-19 than in the least affected industries.Originality/valueMany studies have attempted to investigate the effect of corporate governance on stock returns during the first wave of the pandemic. However, to the authors' knowledge, this is the first study that focuses on different waves that occurred during 2020 and 2021.