The impact of operating flexibility on firms’ performance during the COVID-19 outbreak: Evidence from China

This paper investigates the effect of firm-level operating flexibility on stock performance during the COVID-19 outbreak in China. We find that firm-level operating flexibility is significantly positively correlated with the cumulative abnormal stock returns that occurred during the event window, an...

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Detalles Bibliográficos
Autores principales: Liu, Hao, Yi, Xingjian, Yin, Libo
Formato: Online Artículo Texto
Lenguaje:English
Publicado: Elsevier Inc. 2021
Materias:
Article
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7574684/
https://www.ncbi.nlm.nih.gov/pubmed/33100927
http://dx.doi.org/10.1016/j.frl.2020.101808
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author Liu, Hao
Yi, Xingjian
Yin, Libo
author_facet Liu, Hao
Yi, Xingjian
Yin, Libo
author_sort Liu, Hao
collection PubMed
description This paper investigates the effect of firm-level operating flexibility on stock performance during the COVID-19 outbreak in China. We find that firm-level operating flexibility is significantly positively correlated with the cumulative abnormal stock returns that occurred during the event window, and this positive relation is more pronounced in firms in the provinces most affected by the epidemic. This positive relation is also more obvious in firms that have relatively fewer fixed assets. Therefore, our results provide direct empirical evidence that the real options embedded in operating flexibility played an important role during the COVID-19 outbreak.
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spelling pubmed-75746842020-10-21 The impact of operating flexibility on firms’ performance during the COVID-19 outbreak: Evidence from China Liu, Hao Yi, Xingjian Yin, Libo Financ Res Lett Article This paper investigates the effect of firm-level operating flexibility on stock performance during the COVID-19 outbreak in China. We find that firm-level operating flexibility is significantly positively correlated with the cumulative abnormal stock returns that occurred during the event window, and this positive relation is more pronounced in firms in the provinces most affected by the epidemic. This positive relation is also more obvious in firms that have relatively fewer fixed assets. Therefore, our results provide direct empirical evidence that the real options embedded in operating flexibility played an important role during the COVID-19 outbreak. Elsevier Inc. 2021-01 2020-10-20 /pmc/articles/PMC7574684/ /pubmed/33100927 http://dx.doi.org/10.1016/j.frl.2020.101808 Text en © 2020 Elsevier Inc. All rights reserved. Since January 2020 Elsevier has created a COVID-19 resource centre with free information in English and Mandarin on the novel coronavirus COVID-19. The COVID-19 resource centre is hosted on Elsevier Connect, the company's public news and information website. Elsevier hereby grants permission to make all its COVID-19-related research that is available on the COVID-19 resource centre - including this research content - immediately available in PubMed Central and other publicly funded repositories, such as the WHO COVID database with rights for unrestricted research re-use and analyses in any form or by any means with acknowledgement of the original source. These permissions are granted for free by Elsevier for as long as the COVID-19 resource centre remains active.
spellingShingle Article
Liu, Hao
Yi, Xingjian
Yin, Libo
The impact of operating flexibility on firms’ performance during the COVID-19 outbreak: Evidence from China
title The impact of operating flexibility on firms’ performance during the COVID-19 outbreak: Evidence from China
title_full The impact of operating flexibility on firms’ performance during the COVID-19 outbreak: Evidence from China
title_fullStr The impact of operating flexibility on firms’ performance during the COVID-19 outbreak: Evidence from China
title_full_unstemmed The impact of operating flexibility on firms’ performance during the COVID-19 outbreak: Evidence from China
title_short The impact of operating flexibility on firms’ performance during the COVID-19 outbreak: Evidence from China
title_sort impact of operating flexibility on firms’ performance during the covid-19 outbreak: evidence from china
topic Article
url https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7574684/
https://www.ncbi.nlm.nih.gov/pubmed/33100927
http://dx.doi.org/10.1016/j.frl.2020.101808
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