COVID-19 impact on firm investment-Evidence from Chinese publicly listed firms.
J Asian Econ
; 75: 101320, 2021 Aug.
Article
in English
| MEDLINE | ID: covidwho-1231971
ABSTRACT
The COVID-19 outbreak had a significant impact on business cash flows and investment activities. This paper examined the COVID-19 impact on Chinese business investment in 3326 A-share listed quarterly financial reports, from which it was found that the negative relationship was more pronounced in the large, eastern Chinese state-owned firms. Using a propensity score matching method and difference-in-differences estimation, corporate financial flexibility was also examined, with the results indicating that high cash flexibility provided a buffer that allowed firms to better deal with adverse external shocks as the firms that had high cash flexibility were able to significantly increase their investments after the COVID-19 outbreak. Various robustness tests were conducted, all of which verified the robustness of the results. Overall, the empirical results provided evidence that the COVID-19 pandemic in China had a negative impact on Chinese listed firms, and verified the vital role of flexible financial reserves for firm survival and development during crises.
Full text:
Available
Collection:
International databases
Database:
MEDLINE
Type of study:
Experimental Studies
/
Prognostic study
Language:
English
Journal:
J Asian Econ
Year:
2021
Document Type:
Article
Affiliation country:
J.asieco.2021.101320
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