Please use this identifier to cite or link to this item: http://hdl.handle.net/11718/25698
Title: COVID-19 pandemic and debt financing by firms: unravelling the channels
Authors: Gopalakrishnan, Balagopal
Jacob, Joshy
Mohapatra, Sanket
Keywords: COVID-19;Pandemic;Bond financing;Syndicated loans;Work-from-home
Issue Date: 18-Jun-2022
Publisher: Elsevier
Citation: Gopalakrishnan, B., Jacob, J., & Mohapatra, S. (2022). COVID-19 pandemic and debt financing by firms: Unravelling the channels. Economic Modelling, 105929.
Abstract: The COVID-19-induced disruptions and the consequent government responses stretched the financial resources of firms. Recent studies document an increase in debt financing by firms during the pandemic. Using firm-level data from 61 countries, we deepen the understanding of the impact of the pandemic by examining the variation in loan and bond financing attributable to COVID-19-specific factors. Indicative of heightened precautionary needs, firms with higher pandemic exposure and those located in countries with stringent lockdowns have a higher propensity to raise debt. Furthermore, firms in industries less amenable to remote working also have a higher propensity to raise debt, but face higher financing costs compared to their peers. Reflective of opportunistic investment motives, firms that hold a relatively positive outlook have a greater likelihood of raising loan financing. The findings draw attention to the role of real-side factors and managerial motives that drive debt financing during a distress episode.
URI: http://hdl.handle.net/11718/25698
ISSN: 0264-9993
Appears in Collections:Journal Articles

Files in This Item:
File Description SizeFormat 
COVID-19_pandemic_and_debt_financing_by_firms_Unravelling_the_channels.pdf
  Restricted Access
594.12 kBAdobe PDFView/Open Request a copy


Items in IIMA Institutional Repository are protected by copyright, with all rights reserved, unless otherwise indicated.