Uncertainty, corporate investment, and hiring: The case of COVID-19

John R. Graham, Naoshi Ikeda, Kotaro Inoue and Takashi Yamasaki

Economics Letters, 2024, vol. 244, issue C

Abstract: We investigate how the COVID-19 pandemic affected CFOs’ self-assessed uncertainty about revenue growth and its impact on investment and hiring plans, using data from two consecutive surveys of the same CFOs conducted before and during the pandemic. Following the WHO's declaration, firm-level uncertainty increased, and investment plans were restrained. Furthermore, heightened firm-level uncertainty dampened firms' investment and hiring plans, even after controlling for other pandemic-related factors, as well as financial and investment flexibility.

Keywords: Uncertainty; Corporate planning; COVID-19; Investment; Employment; Surveys (search for similar items in EconPapers)
JEL-codes: D22 E22 E24 G01 G30 G31 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:244:y:2024:i:c:s0165176524005093

DOI: 10.1016/j.econlet.2024.112025

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