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

See all articles by Lixiang Wang

Lixiang Wang

South China University of Technology

Yupei Liu

Nankai University

Lujun Qi

Orient Securities Company Limited

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

Suggested Citation

Wang, Lixiang and Liu, Yupei and Qi, Lujun, How Do Soes React to the Covid-19 Variant Shock? Evidence from China's Government Epidemic Response and Firm Cash Holdings (December 7, 2022). Available at SSRN: https://ssrn.com/abstract=4295611 or http://dx.doi.org/10.2139/ssrn.4295611

Lixiang Wang (Contact Author)

South China University of Technology ( email )

Wushan
Guangzhou, AR 510640
China

Yupei Liu

Nankai University ( email )

94 Weijin Road
Tianjin, 300071
China

Lujun Qi

Orient Securities Company Limited ( email )

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