Resilient product and production adaptation in a large-scale disaster: Does it pay off?

Pandemic outbreaks can disrupt firms' normal operations, so they demand a resilient response. Firms can combine social responsibility initiatives with resilient responses by reconfiguring their production resources for pandemic relief. It remains unclear, however, whether pandemic-relieving product adaptation (in short, PRPA) improves financial performance. We draw on stakeholder theory to analyze the effect of a PRPA strategy on the stock returns of US-listed manufacturing firms during the COVID-19 pandemic-the most enduring and large-scale pandemic in recent history. The results reveal that the stock market reacts more positively to PRPA under severe pandemic circumstances and for firms with low political connectedness, low media coverage, and/or more unique production technology. The findings offer important implications for operations theory and practice.