Cash Holdings and Firm-Level Exposure to Epidemic Diseases

Daniel Tut

MPRA Paper from University Library of Munich, Germany

Abstract: We study the effects of firm-level exposure to an epidemic disease on corporate cash holdings amongst U.S firms. Using a text-based measure of firm-level exposure to epidemic diseases and difference-in-difference estimation strategy, we document a positive relationship between the onset of an epidemic disease and corporate cash holdings. We find that, amongst all the recent epidemics, COVID-19 has the strongest impact on cash holdings and that this effect is mostly driven by negative sentiments around the COVID-19 pandemic.

Keywords: Cash; COVID-19; SARS; H1N1; Ebola; Zika; Epidemics; Epidemiology; Virus; Pandemic; Liquid assets; Liquidity management (search for similar items in EconPapers)
JEL-codes: G00 G01 G30 G31 G32 G38 I11 (search for similar items in EconPapers)
Date: 2021-08-28
New Economics Papers: this item is included in nep-cfn and nep-isf
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:109704

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