COVID-19 pandemic and firm performance: An empirical investigation using a cross-country sample

Abstract

We investigate the effect of COVID-19 pandemic on firm performance using the quarterly financial data of firms from 89 countries and show that the pandemic has a detrimental impact on firm performance. The firms that held more long-term debt and account receivables on their balance sheet before the pandemic were relatively more affected amid the pandemic. The cash buffers can make firms more resilient to the COVID-19 crisis. The quality of a country's governance plays a vital role in mitigating the adverse impact of the pandemic on firm performance.

Keywords

• COVID-19
• Pandemic
• Firm performance
• Firm value
• Liquidity
• Governance indicators