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

作者：Rüdiger Fahlenbrach, Kevin Rageth, René M. Stulz · 发表于：Review of Financial Studies · 年份：2020 · DOI：10.1093/rfs/hhaa134 · 被引用次数：507 · 研究领域：Corporate Finance and Governance、Financial Markets and Investment Strategies、Corporate Taxation and Avoidance

Abstract 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.