Izvorni znanstveni članak
https://doi.org/10.1080/1331677X.2022.2132351
Do financial asset holdings affect investor expectations under negative events? The shock of COVID-19 pandemic
Nou Xu
Yu Zhang
Zhihui Liu
Bei Lyu
Sažetak
Holding excessive financial assets will lead to corporate financialization,
making investors underestimate its risks in front of
extreme benefits and the “reservoir effect” in boom periods, especially
in rapid-growing emerging economies. Few studies have
explored the investors’ real perceptions and attitudes towards
such risks when dealing with unexpected shocks. The 2019 novel
coronavirus disease (COVID-19) provides new insights into these
questions. Using event study method, this study examines how
investors react to corporate financialization in the risk-release condition.
First, we find that firms with more financial asset holdings
experience significant lower market return during the COVID-19
pandemic. Second, we find that the pandemic-induced drop in
stock returns is milder when firms hold more low-liquidity or safe
financial assets, have higher solvency, are less exposed to COVID-
19 pandemic and have better information environment. These
findings show that the investors’ attitude is widely negative
towards corporate financialization when the negative shock
comes and strong financial flexibility and good corporate governance
can alleviate the risk. It implicates that the hidden risks of
corporate financialization can be perceived by investors and
responded by “voting with their feet” and the managers should
be alert to it rather than just seeking financial benefits.
Ključne riječi
COVID-19 pandemic; financial asset holdings; investor expectations; stock market reaction
Hrčak ID:
306684
URI
Datum izdavanja:
30.4.2023.
Posjeta: 219 *