The Review of Corporate Finance Studies Vol. 12 No. 1 2023
Firm Finances and the Spread of COVID-19: Evidence from Nursing Homes
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.
- DOI
- 10.1093/rcfs/cfac041
- Volume
- 12
- Issue
- 1
- Pages
- 1-35
- Language
- en
- Sources
- openalex bibtex:phds-export.bib crossref