Firm Finances and the Spread of COVID-19: Evidence from Nursing Homes

60 Pages Posted: 4 Aug 2020 Last revised: 8 Feb 2023

See all articles by Taylor A. Begley

Taylor A. Begley

University of Kentucky

Daniel Weagley

Georgia Institute of Technology - Scheller College of Business

Date Written: September 14, 2022

Abstract

We find that firms' financial resources play an important role in mitigating the spread of COVID-19. We study nursing homes -- whose residents account for over one-third of all U.S. COVID-19 deaths -- at a time when investment in risk mitigation was costly and critical. Facilities with less liquidity and those experiencing more severe cash flow shocks had more cases of COVID-19. The importance of cash flow is further supported by tests exploiting state-level variation in Medicaid reimbursement expansion. Evidence on personal protective equipment supplies suggests a lack of financial resources leads to lower investment in risk mitigation.

Keywords: COVID-19, financial constraints, stakeholder welfare

JEL Classification: G00, G30, I1, I10

Suggested Citation

Begley, Taylor A. and Weagley, Daniel, Firm Finances and the Spread of COVID-19: Evidence from Nursing Homes (September 14, 2022). Georgia Tech Scheller College of Business Research Paper No. 3659480, Available at SSRN: https://ssrn.com/abstract=3659480 or http://dx.doi.org/10.2139/ssrn.3659480

Taylor A. Begley (Contact Author)

University of Kentucky ( email )

Lexington, KY 40506
United States

HOME PAGE: http://www.taylorbegley.com

Daniel Weagley

Georgia Institute of Technology - Scheller College of Business ( email )

800 West Peachtree St.
Atlanta, GA 30308
United States
(404) 385-3015 (Phone)

HOME PAGE: http://www.danielweagley.com

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