Corporate leverage during COVID-19

Department

Business

Document Type

Article

Publication Date

3-2024

Abstract

The article examines the impact of the health pandemic on global firm leverage from 2020 to 2021 and finds firms decreased their leverage during the pandemic via long-term and short-term debt. As COVID-19 limited external funding opportunities, firms use internal capital to reduce debt. Further analysis indicates that this effect is significant for financially constrained firms. The results are robust to different proxies.

Journal Title

Applied Economics Letters

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