How Valuable Is Financial Flexibility when Revenue Stops? Evidence from the COVID-19 Crisis

被引:350
作者
Fahlenbrach, Rudiger [1 ,2 ,3 ]
Rageth, Kevin [1 ]
Stulz, Rene M. [3 ,4 ,5 ]
机构
[1] Ecole Polytech Fed Lausanne EPFL, Lausanne, Switzerland
[2] Swiss Finance Inst, Zurich, Switzerland
[3] ECGI, Brussels, Belgium
[4] Ohio State Univ, Fisher Coll Business, Columbus, OH 43210 USA
[5] NBER, Cambridge, MA 02138 USA
关键词
CORPORATE-FINANCE; AGENCY COSTS; CASH FLOW; CONSTRAINTS; RISK; FIRMS; DEBT;
D O I
10.1093/rfs/hhaa134
中图分类号
F8 [财政、金融];
学科分类号
0202 ;
摘要
Firms with greater financial flexibility should be better able to fund a revenue shortfall resulting from the COVID-19 shock and benefit less from policy responses. We find that firms with high financial flexibility within an industry experience a stock price drop that is 26%, or 9.7 percentage points, lower than those with low financial flexibility. This differential return persists as stock prices rebound. Firms more exposed to the COVID-19 shock benefit more from cash holdings. No evidence suggests that recent payouts worsened the average firm's drop in stock price. Our results cannot be explained by a leverage effect.
引用
收藏
页码:5474 / 5521
页数:48
相关论文
共 62 条
[11]   On persistence in mutual fund performance [J].
Carhart, MM .
JOURNAL OF FINANCE, 1997, 52 (01) :57-82
[12]   The Employment Effects of Credit Market Disruptions: Firm-level Evidence from the 2008-9 Financial Crisis [J].
Chodorow-Reich, Gabriel .
QUARTERLY JOURNAL OF ECONOMICS, 2014, 129 (01) :1-59
[13]   Estimating the COVID-19 cash crunch: Global evidence and policy [J].
De Vito, Antonio ;
Gomez, Juan-Pedro .
JOURNAL OF ACCOUNTING AND PUBLIC POLICY, 2020, 39 (02)
[14]  
DeAngelo H., 2009, Working Paper
[15]   Dividend policy and the earned/contributed capital mix: a test of the life-cycle theory [J].
DeAngelo, Harry ;
DeAngelo, Linda ;
Stulz, Rene M. .
JOURNAL OF FINANCIAL ECONOMICS, 2006, 81 (02) :227-254
[16]   Corporate Deleveraging and Financial Flexibility [J].
DeAngelo, Harry ;
Goncalves, Andrei S. ;
Stulz, Rene M. .
REVIEW OF FINANCIAL STUDIES, 2018, 31 (08) :3122-3174
[17]   Financial flexibility and corporate liquidity [J].
Denis, David J. .
JOURNAL OF CORPORATE FINANCE, 2011, 17 (03) :667-674
[18]  
Ding W., J FINANC ECON
[19]   How many jobs can be done at home? [J].
Dingel, Jonathan, I ;
Neiman, Brent .
JOURNAL OF PUBLIC ECONOMICS, 2020, 189
[20]   Costly external finance, corporate investment, and the subprime mortgage credit crisis [J].
Duchin, Ran ;
Ozbas, Oguzhan ;
Sensoy, Berk A. .
JOURNAL OF FINANCIAL ECONOMICS, 2010, 97 (03) :418-435