Impact of COVID-19 exposure on working capital management: The moderating effect of investment opportunities and government incentives

This study examines the impact of the COVID-19 pandemic on firms’ working capital management (WCM) covering 2,542 US-publicly traded firms for the period 2019Q1–2021Q2. Proxying WCM as cash conversion cycle (CCC), I find that COVID-19-exposed firms operate with higher levels of CCC. I show that firm...

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Detalles Bibliográficos
Autor principal: Tarkom, Augustine
Formato: Online Artículo Texto
Lenguaje:English
Publicado: Elsevier Inc. 2022
Materias:
Article
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8721513/
https://www.ncbi.nlm.nih.gov/pubmed/35002552
http://dx.doi.org/10.1016/j.frl.2021.102666
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author Tarkom, Augustine
author_facet Tarkom, Augustine
author_sort Tarkom, Augustine
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description This study examines the impact of the COVID-19 pandemic on firms’ working capital management (WCM) covering 2,542 US-publicly traded firms for the period 2019Q1–2021Q2. Proxying WCM as cash conversion cycle (CCC), I find that COVID-19-exposed firms operate with higher levels of CCC. I show that firms with more investment opportunities and firms that receive government incentives (deferred taxes and investment tax credit (DT_ITC)) operate with lower levels of CCC. Overall, I provide evidence of the significant adverse impact of COVID-19 on WCM and show that the effect could be mitigated with an increase in investment opportunities and government incentives.
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spelling pubmed-87215132022-01-03 Impact of COVID-19 exposure on working capital management: The moderating effect of investment opportunities and government incentives Tarkom, Augustine Financ Res Lett Article This study examines the impact of the COVID-19 pandemic on firms’ working capital management (WCM) covering 2,542 US-publicly traded firms for the period 2019Q1–2021Q2. Proxying WCM as cash conversion cycle (CCC), I find that COVID-19-exposed firms operate with higher levels of CCC. I show that firms with more investment opportunities and firms that receive government incentives (deferred taxes and investment tax credit (DT_ITC)) operate with lower levels of CCC. Overall, I provide evidence of the significant adverse impact of COVID-19 on WCM and show that the effect could be mitigated with an increase in investment opportunities and government incentives. Elsevier Inc. 2022-06 2021-12-31 /pmc/articles/PMC8721513/ /pubmed/35002552 http://dx.doi.org/10.1016/j.frl.2021.102666 Text en © 2021 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
Tarkom, Augustine
Impact of COVID-19 exposure on working capital management: The moderating effect of investment opportunities and government incentives
title Impact of COVID-19 exposure on working capital management: The moderating effect of investment opportunities and government incentives
title_full Impact of COVID-19 exposure on working capital management: The moderating effect of investment opportunities and government incentives
title_fullStr Impact of COVID-19 exposure on working capital management: The moderating effect of investment opportunities and government incentives
title_full_unstemmed Impact of COVID-19 exposure on working capital management: The moderating effect of investment opportunities and government incentives
title_short Impact of COVID-19 exposure on working capital management: The moderating effect of investment opportunities and government incentives
title_sort impact of covid-19 exposure on working capital management: the moderating effect of investment opportunities and government incentives
topic Article
url https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8721513/
https://www.ncbi.nlm.nih.gov/pubmed/35002552
http://dx.doi.org/10.1016/j.frl.2021.102666
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