COVID-19 PANDEMIC AND FIRM PERFORMANCE: AN EMPIRICAL INVESTIGATION USING A CROSS-COUNTRY SAMPLE
We use quarterly financial data of an international sample of firms to study the impact of the COVID-19 pandemic on firm performance. Our results indicate that the pandemic negatively affects firm performance proxied by Tobin’s Q. We document that firms that held more long-term debt and account receivables on their balance sheet before the pandemic are relatively more affected amid the pandemic. We also report that cash buffers can make firms more resilient to the COVID-19 crisis. Finally, we highlight the role of country governance in mitigating the adverse impact of the pandemic on firm performance. Overall, our results indicate the importance of financial flexibility and governance quality in making corporates more immune to COVID-19 like-crisis.