Work from Home, Managerial Sentiment, and Corporate Liquidity Management under COVID-19 (preprint)

COVID-19 pandemic lockdowns and mobility restrictions have forced many individuals to work from home, leading to diverse isolation-induced mental health consequences. Using the granularity of foot traffic data, we show that prolonged work from home during the COVID-19 outbreak dampens managerial sentiment. This baseline result is robust to the identification strategy exploiting the staggered implementation of stay-at-home orders across the United States. Further analyses indicate that the induced negative sentiment elevates managers' perceived risk, driving them to accumulate more cash in response to the unprecedented COVID-19 cash-flow shock. But this increase in cash destroys shareholder value.