Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/274784 
Year of Publication: 
2022
Citation: 
[Journal:] Journal of Risk and Financial Management [ISSN:] 1911-8074 [Volume:] 15 [Issue:] 6 [Article No.:] 262 [Year:] 2022 [Pages:] 1-14
Publisher: 
MDPI, Basel
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.
Subjects: 
cash burn effect
cash holdings
COVID-19
national culture
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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