The Changes in the Economic Environment and Corporate Information Asymmetry—Focusing on the COVID-19 Pandemic

The COVID-19 pandemic not only caused considerable disruptions in the capital markets, but also threatened firm sustainability. There are quite a few proxies that can measure a company’s sustainability, but information asymmetry is a representative one. Hence, we use information asymmetry to analyze whether the disruptions caused by changes in the corporate environment during the COVID-19 pandemic fostered significant differences in the sustainability of firms. The findings reveal the following: First, in the full sample, information asymmetry significantly increased during the pandemic. This suggests that the pandemic may have led to capital market disruptions, and thus, low sustainability of firms. Second, analyzing industry variations in information asymmetry during the pandemic reveals that information asymmetry does not significantly increase in the pharmaceutical and information technology industries. In contrast, it significantly increases in the samples belonging to the manufacturing and construction industries. This study provides the empirical evidence of the effects of COVID-19 on company’s sustainability. Based on this study, it should focus on finding way to reduce in-formation asymmetry in the capital market to increase the sustainability of firms in the long run.