Carletti E, Oliviero T, Pagano M, Pelizzon L, Subrahmanyam M.G.
Friday, 26 February 2021 19:17
The COVID-19 shock and equity shortfall: Firm-level evidence from italy
Written by Loriana PelizzonAdditional Info
- File: Link
- Published in: THE REVIEW OF CORPORATE FINANCE STUDIES, vol. 9, pp. 534-568 (ISSN 2046-9128)
- Year: 2020
- Abstract: We employ a representative sample of 80,972 Italian firms to forecast the drop in profits and the equity shortfall triggered by the COVID-19 lockdown. A 3-month lockdown generates an aggregate yearly drop in profits of about 10% of GDP, and 17% of sample firms, which employ 8.8% of the sample’s employees, become financially distressed. Distress is more frequent for small and medium-sized enterprises, for firms with high pre-COVID-19 leverage, and for firms belonging to the Manufacturing and Wholesale Trading sectors. Listed companies are less likely to enter distress, whereas the correlation between distress rates and family firm ownership is weak. (JEL G01, G32, G33)
Published in
Financial Risk
Loriana Pelizzon
Professor in Finance, Università Ca' Foscari Venezia & Goethe Universität Frankfurt am Main
Promoting partner, Scientific Committees and Director of the Area Financial Risk
https://www.unive.it/data/persone/5591706