Abstract
This study investigates the impact of COVID-19 exposure on corporate cash holdings using firm data across sixteen developing and developed economies. The results show that firms reserve more cash when their exposure to COVID-19 increases. We also find a cash burn effect during the COVID-19 pandemic, meaning that the cash holdings are drained when firm exposure to the pandemic exceeds a tipping point. The effect is more pronounced in larger firms and firms with less cash reserve. Further analyses reveal that the cash burn effect tends to be stronger in countries with a high level of individualism and weaker in countries with high levels of risk aversion, masculinity, and long-term orientation. The findings provide fresh insights into the connections among corporate cash holdings, national cultures, and firm-level exposure to COVID-19.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
