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Does COVID-19 make the firms’ performance worse? Evidence from the Chinese listed companies

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  • Zhang, Dongyang
  • Zheng, Wenping

Abstract

The influence of pandemics is still a black box, and the mechanism is attracting the attention of policymakers and scholars to guide the policy design in the aftermath of Covid-19 pandemics. This paper takes an in-depth look at the performance impact of pandemics from the perspective of operation, which is essential in a comprehensive evaluation of the economic effects of pandemics. With the help of novel quarterly data of Chinese listed firms from 2019 Q1 to 2021 Q2, we find that the Covid-19 decreases the sale-related profitability. For the mechanism, this paper finds that the pandemics make the operation longer, increase the cost, and reduce the potential cash flows. In addition, the environmental tax can significantly weaken the adverse shocks. The policy implication is that the sale boosting or consumption stimulus is vital in economic recovery, and the governments should efficiently use the positive effect of environmental tax.

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  • Zhang, Dongyang & Zheng, Wenping, 2022. "Does COVID-19 make the firms’ performance worse? Evidence from the Chinese listed companies," Economic Analysis and Policy, Elsevier, vol. 74(C), pages 560-570.
    • Handle: RePEc:eee:ecanpo:v:74:y:2022:i:c:p:560-570
    DOI: 10.1016/j.eap.2022.03.001
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    More about this item

    Keywords

    COVID-19; Operation performance; Environmental tax;
    All these keywords.

    JEL classification:

    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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