How Do Soes React to the Covid-19 Variant Shock? Evidence from China's Government Epidemic Response and Firm Cash Holdings
12 Pages Posted: 14 Dec 2022
Date Written: December 7, 2022
Abstract
This study examines how the Delta variant wave of COVID-19 affects the cash holdings of state-owned enterprises (SOEs) in the context of China. Using a difference-in-difference method, we show that SOEs might increase their cash holdings after the Delta variant wave; rigorous government epidemic control measures could accelerate this increasing behavior; and economic support measures have little influence. The empirical results are robust to a series of tests, including an alternative proxy for cash holdings, propensity score matching difference-in-difference (PSM-DID) estimation, and placebo tests.
Keywords: State-owned enterprises, cash holdings, COVID-19, Delta variant wave, Government epidemic control
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