Investment, Q and epidemic diseases

Daniel Tut

Finance Research Letters, 2022, vol. 47, issue PB

Abstract: We study the effects of epidemic diseases on corporate investment. Epidemic diseases tend to be unanticipated and exogenous to firms’ decisions. Using difference-in-difference estimation strategy and a firm-level exposure to an epidemic disease measure, we find that corporate investment declines significantly following the onset of an epidemic disease. We also show that the COVID-19 pandemic has the strongest negative impact on investment when compared to the other most recent epidemic diseases.

Keywords: Capital expenditure; COVID-19; SARS; H1N1; Ebola; Zika; Pandemic (search for similar items in EconPapers)
JEL-codes: G30 G31 G32 G38 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:47:y:2022:i:pb:s1544612322002033

DOI: 10.1016/j.frl.2022.102943

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