Corporate leverage during COVID-19

Tahsin Imtiazul Huq, M. Kabir Hassan and Dung Viet Tran

Applied Economics Letters, 2025, vol. 32, issue 13, 1864-1868

Abstract: This article examines the impact of the health pandemic on global firm leverage from 2020 to 2021, and finds firms decrease their leverage during the pandemic, via long-, and short-term debt. As COVID-19 limited external funding opportunities, firms are using internal capital to reduce debt. Further analysis indicates that this effect is significant for financially constrained firms. The results are robust to different proxies.

Date: 2025
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DOI: 10.1080/13504851.2024.2331656

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