Abstract
The redeployability of a firm's assets plays a pivotal role during the COVID-19 pandemic. This paper introduces a real options model that elucidates a firm's decision-making process regarding the reallocation of assets between its primary business product and emergency supplies. Furthermore, it explores the influence of asset redeployability on firm value. Theoretical results underscore the positive impact of asset redeployability on firm value, particularly evident in firms exhibiting a strong correlation between their main business product and emergency product. Empirical evidence from data encompassing A-share listed companies in the Chinese stock market during the COVID-19 period robustly substantiates these theoretical findings.
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