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

54 Pages Posted: 4 Aug 2020 Last revised: 25 Nov 2020

See all articles by Taylor A. Begley

Taylor A. Begley

Washington University in St. Louis - John M. Olin Business School

Daniel Weagley

Georgia Institute of Technology - Scheller College of Business

Date Written: October 26, 2020

Abstract

Firms face difficult decisions regarding investment in the protection of nonfinancial stakeholders. We find that a firm's financial health plays an important role in mitigating the spread of COVID-19 by studying nursing homes, whose residents have accounted for about 40% of all U.S. COVID-19 deaths. We find that nursing homes with less liquidity (pre-pandemic days-cash-on-hand) had a higher likelihood of COVID-19 reaching patients in their facility. Those experiencing larger negative cash flow shocks also had a much higher likelihood of COVID-19, and the relationship is strongest for financially constrained nursing homes.

Suggested Citation

Begley, Taylor A. and Weagley, Daniel, Firm Finances and the Spread of COVID-19: Evidence from Nursing Homes (October 26, 2020). 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)

Washington University in St. Louis - John M. Olin Business School ( email )

One Brookings Drive
Campus Box 1133
St. Louis, MO 63130-4899
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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