Firms' COVID-19 Pandemic Exposure and Corporate Cash Policy: Evidence from China.

Zhongda He, Sandy Suardi, Kai Wang, Yang Zhao

Abstract read

In one paragraph

Article in Economic modelling, 2022. The graph could read no effect estimate from its abstract, so it casts no vote on the map. Not yet cited in PubMed.

0numbers the graph read from it

0cells of the map it votes in

0citing papers in PubMed

–field-weighted citation impact

1 · What the graph read from it

What it found

Each row is one number read from the abstract, on the scale the paper reported it, with its interval. Left of the dashed line favours the treatment, right favours the comparator. Under each row is the sentence it came from. New to these charts? A ten-minute tutorial.

The abstract states no effect estimate the extractor could read, or names no intervention and outcome on the map, so this paper lights no cell and moves no belief. It is still indexed, cited and linked below.

2 · The registry

The trial behind it

Trials whose registry record cites this paper, or whose number appears in the abstract. A trial that started after this paper was published is citing it as background, not reporting it.

Neither the registry nor the abstract names a trial number. If this is a trial report, that itself is worth knowing.

3 · Its place in the literature

Who cites it

0 citing papers in PubMed.

No citing paper in PubMed yet.

4 · The record

Corrections and comments

PubMed lists nothing against this paper. Absence here is not a guarantee, only a check that was made.

5 · Who and what money

Authors and funding

4 authors.

Zhongda HeNewhuadu Business School, Minjiang University, 200 Xiyuangong Road, Fuzhou, Fujian, 350108, China.

Sandy SuardiSchool of Business, University of Wollongong, Northfields Ave, Wollongong, NSW, 2522, Australia.

Kai WangChinese Academy of Finance and Development, Central University of Finance and Economics, 39 South College Road, Haidian, Beijing, 100081, China.

Yang ZhaoChinese Academy of Finance and Development, Central University of Finance and Economics, 39 South College Road, Haidian, Beijing, 100081, China.

Funding

No grant is acknowledged in the PubMed record.

6 · The paper itself

Abstract

The COVID-19 pandemic adversely impacted economic activity, decreased corporate revenues, and magnified cash flow fluctuations. We study how Chinese listed firms' COVID exposure influences their cash holdings. A firm's COVID exposure is measured by its excess stock return responses to globally newly infected cases while controlling for market return. Firms increase (decrease) cash balances when their stock returns fall (increase) with COVID severity due to precautionary motives. Firms cannot predict the evolution of the pandemic, which impacts demand and supply and the cash conversion cycle. The deteriorating business condition also increases external financing costs with non-state-owned, low-growth, small, and firms without overseas businesses facing higher financial frictions. Furthermore, firms with good corporate governance tend to pre-empt operational uncertainty by increasing cash holdings. The increased cash holdings translate to more R&D expenditure but lesser capital investment. Our results remain robust to placebo tests, using excess cash and alternative COVID exposure measures.

Indexed as

Cash holdingCorporate governanceExcess cashFinancing frictionFirms' COVID exposure

Identifiers

PMID36032988

DOI10.1016/j.econmod.2022.105999

PMCPMC9392874

What OpenQuestion holds

Textmetadata

Read underepoch 390

Registered trials

None linked

Read under generation 80e0d062 · epoch 390. Bibliography from PubMed, PubMed Central and OpenAlex; grants from NIH RePORTER; trial links from ClinicalTrials.gov; estimates, votes and beliefs from the OpenQuestion graph.