Author: Nguyen, L. D.
Title: Liquidity Management and Stock Price Reactions in an Economic Crisis Cord-id: x9em4cyx Document date: 2022_1_1
ID: x9em4cyx
Snippet: The COVID-19 outbreak badly hits worldwide economies by disrupting supply and demand. These disruptions negatively affect sales and make firms to face cash-flow insolvency threats. Hence, this paper examines if good liquidity management help to mitigate adverse reactions of stock prices to the COVID-19 crisis. Analyses highlight that firms with a high liquidity risk experience a decrease in their cumulative average abnormal return, which is more severe than low-liquidity-risk firms do. Also, fir
Document: The COVID-19 outbreak badly hits worldwide economies by disrupting supply and demand. These disruptions negatively affect sales and make firms to face cash-flow insolvency threats. Hence, this paper examines if good liquidity management help to mitigate adverse reactions of stock prices to the COVID-19 crisis. Analyses highlight that firms with a high liquidity risk experience a decrease in their cumulative average abnormal return, which is more severe than low-liquidity-risk firms do. Also, firms with a high cash ratio do not appear to face cash-flow insolvency threats in this pandemic. Hence, their stock price does not experience a significant decrease, or their cumulative average abnormal return is not statistically different from zero. © 2022, The Author(s), under exclusive license to Springer Nature Switzerland AG.
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