Liquidity Management During the COVID-19 Pandemic

Asia-Pacific Journal of Financial Studies, Forthcoming

23 Pages Posted: 12 Jan 2021

See all articles by Heitor Almeida

Heitor Almeida

University of Illinois at Urbana-Champaign; National Bureau of Economic Research (NBER)

Date Written: December 15, 2020

Abstract

With the help of the US government and committed funding from bank credit lines, the US corporate sector responded to the COVID-19 cash flow shock by issuing long-term debt to increase cash holdings. I use a case study, evidence from recent research and a theoretical model to explain the logic behind the changes in corporate financial policy that happened during 2020, and to discuss the importance of US government policies to support the market for long-term debt. I also point out to open research questions about liquidity management, in particular questions that were highlighted by how companies reacted to the COVID-19 pandemic.

Keywords: Cash, credit lines, Coronavirus, debt, financial markets

JEL Classification: G31, G32

Suggested Citation

Almeida, Heitor, Liquidity Management During the COVID-19 Pandemic (December 15, 2020). Asia-Pacific Journal of Financial Studies, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3759618 or http://dx.doi.org/10.2139/ssrn.3759618

Heitor Almeida (Contact Author)

University of Illinois at Urbana-Champaign ( email )

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United States
217-3332704 (Phone)

HOME PAGE: http://www.business.illinois.edu/FacultyProfile/faculty_profile.aspx?ID=11357

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
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