Organizational capital and stock performance during Crises: Moderating role of generalist CEO

This study examines the relationship between organizational capital (OC) and stock performance during the two recent crisis periods, namely the GFC and COVID-19. Economic crises highlight the sustainable competitiveness of firms, providing an opportunity to identify the role of OC. OC is intangible capital that encompasses intrinsic business processes and expertise, facilitating more efficient resource utilization than competitors. Results show that a greater OC is significantly associated with higher stock returns during both crisis periods. The association is robust to the models with firm-fixed effects and instrumental variables. In addition, we find evidence that generalist CEOs strengthen this relationship while specialist CEOs do not. This study emphasizes the pivotal role of OC as a protective buffer against external shocks, particularly during periods when the market pays more attention to corporate sustainability.