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Corporate “dash-for-cash” amidst the Covid-19 Pandemic: Evidence from an Emerging Economy

Year: 2024

Type: article

Abstract: This paper seeks to examine the impact of Covid-19 pandemic on corporate cash holding. The research collects data from 531 listed Vietnamese firms for the period 2020Q1-2021Q1. The data are analyzed using panel Fixed Effect model. Results show that corporations hoard more cash in response to the Covid-19 pandemic. This can be attributed to firms’ precautionary purpose and investment delays to a limited extent. Firms’ increased cash holdings are channeled through conservative payout policy. The results further reveal that hoarding cash amid the pandemic alleviates the adverse impacts of the Covid-19 outbreak on investment. Previous studies identified various determinants that affect firms’ cash holding. Our study adds another critical factor, a rare disaster, as an important determinant of corporate cash policy.

Source: Journal of Financial Markets and Governance

DOI: 10.54728/jfmg.202408.00080

Authors: Dung Viet Tran, M. Kabir Hassan, Mohammad Dulal Miah

Institutions: Banking Academy of Vietnam, LSU New Orleans

Language: English

Topic: Corporate Finance and Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: bronze

OpenAlex ID: W4402616204

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