This thesis explores the critical question of how firms respond to crises in an evolving landscape characterized by international trade liberalization, deregulation, and the proliferation of information and communication technologies. By classifying crises according to the degree of responsibility attributed to firms, the thesis delves into the tailored response strategies that emerge. When confronted with exogenous crises, such as natural disasters or geopolitical tensions, firms, perceived as victims, are less likely to be held directly responsible. Nevertheless, they are expected to survive and engage in philanthropic actions considering the devastating impacts of such widespread emergencies. Conversely, when crises stem from within, at least partly, such as mismanagement or ethical issue, firms are expected to acknowledge a moderate to considerable degree of responsibility. Such situations promote firms to focus on strategies that reduce perceived blame, rebuild stakeholder trust, and restore their credibility.

The thesis examines firms’ crisis response strategies in contexts representative of the aforementioned crisis types. The first essay addresses the unique context of the COVID-19 pandemic, a crisis that generally distances firms from direct responsibility but compels them to adapt and survive. This essay focuses on Pandemic-Relieving Product Adaptation (PRPA), a strategy where firms combine social responsibility initiatives with resilient responses by reconfiguring their production resources for pandemic relief. Drawing on stakeholder theory, it analyzes the effect of a PRPA strategy on the stock returns of US-listed manufacturing firms during the COVID-19 pandemic. 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.

In the second essay, the focus shifts to a crisis in which firms find themselves partially culpable: cyberattacks. This essay explores how a firm’s decision to respond (or not) to a cyberattack can shape investor perceptions and influence the stock market. Drawing on attribution theory, the study suggests that a firm response following a cyberattack amplifies investors’ perceptions of the firm’s culpability and doubts about its control over the situation, leading to a more negative stock market reaction. Alternatively, a strategy of nonresponse reduces blame attribution and bolster investor confidence in the firm’s crisis management, resulting in a less negative reaction. This study also identifies contextual and firm-specific factors that trigger the effects of a firm’s response or lack thereof. The empirical results reveal that a response strategy to a cyberattack often leads to more negative market reactions than a nonresponse strategy. Such a negative effect is mitigated when simultaneous attacks across different industries occur or when there is extensive media attention to other corporate news, but amplified if similar attacks are prevalent within the same industry.

This thesis broadens the existing crisis management literature and provides valuable insights for managers and policymakers.