COVID-19 and Corporate Finance

Marco Pagano and Josef Zechner

CSEF Working Papers from Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy

Abstract: We distill evidence about the effects of COVID-19 on companies. Stock price reactions to the shock differed greatly across firms, depending on their resilience to social distancing, financial flexibility, and corporate culture. The same characteristics affected the response of firms’ sales, employment, and asset growth. Despite the shock, firms expanded their balance sheets and liquidity by raising funds from banks, bonds, and equity markets. While listed firms reduced their leverage, unlisted ones, especially small and medium enterprises, increased it. Government support programs helped firms access external funding. We conclude by identifying unexplored research issues regarding the long-run effects of COVID-19 on companies.

Keywords: COVID-19; pandemic; firm resilience; social distancing; financial flexibility; corporate culture; credit supply; leverage; government support; public loan guarantees; Paycheck Protection Program. (search for similar items in EconPapers)
JEL-codes: G11 G12 G13 G21 G24 G28 G32 G33 G35 G38 H81 H84 (search for similar items in EconPapers)
Date: 2022-08-09
New Economics Papers: this item is included in nep-cfn, nep-fmk and nep-sbm
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Citations: View citations in EconPapers (6)

Forthcoming in "The Review of Corporate Finance Studies"

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Journal Article: COVID-19 and Corporate Finance (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:sef:csefwp:651

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