Cash, crisis, and capers: The UK's cashbox policy during COVID-19

Yunhe Dong, Haoyi Luo, Zijin Xu and Xing Yang

Economics Letters, 2024, vol. 240, issue C

Abstract: This study investigates the market impact of the “Cashbox” policy introduced in the UK during the COVID-19 pandemic, which eased shareholder approval norms for equity issuances. Using manually collected data, we find that Cashbox issue announcements yield abnormal returns 4–6 % higher than other issuances, indicating that investors prioritise liquidity over agency concerns during the pandemic. Notably, this effect is more pronounced in firms facing greater financial constraints or exhibiting superior corporate governance. Our study sheds light on the impact of crisis-driven policy changes on financial markets, providing important and timely implications for policymakers and investors on the trade-off between rapid capital access and governance standards in times of significant social crises.

Keywords: Cashbox; Agency problem; Corporate governance; Social crisis (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0165176524002441
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:240:y:2024:i:c:s0165176524002441

DOI: 10.1016/j.econlet.2024.111760

Access Statistics for this article

Economics Letters is currently edited by Economics Letters Editorial Office

More articles in Economics Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().