earticle

영어

This study examines whether firms’ cash holdings affect their performance during the COVID-19 crisis, using Korean firm data. We find that COVID-19 had a negative impact on firm performance. Furthermore, firms with larger cash holdings performed better than those with smaller cash holdings during the pandemic. These results suggest that cash reserves mitigated the adverse impact of COVID-19 on firm performance. We also find that the positive effect of cash holdings on firm performance was more pronounced for firms heavily reliant on exports, whose performance was significantly disrupted due to demand and supply shocks from the pandemic.