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Payout suspensions during the Covid-19 pandemic

Author

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  • Pettenuzzo, Davide
  • Sabbatucci, Riccardo
  • Timmermann, Allan

Abstract

We provide evidence on the unprecedented rate at which firms suspended dividend payments and share repurchases following the outbreak of the Covid-19 pandemic, compare it to the Global Financial Crisis, and estimate the amount of cash firms saved through payout suspensions.

Suggested Citation

  • Pettenuzzo, Davide & Sabbatucci, Riccardo & Timmermann, Allan, 2023. "Payout suspensions during the Covid-19 pandemic," Economics Letters, Elsevier, vol. 224(C).
    • Handle: RePEc:eee:ecolet:v:224:y:2023:i:c:s0165176523000496
    DOI: 10.1016/j.econlet.2023.111024
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    References listed on IDEAS

    as
    1. Michael Halling & Jin Yu & Josef Zechner, 2020. "How Did COVID-19 Affect Firms’ Access to Public Capital Markets?," The Review of Corporate Finance Studies, Society for Financial Studies, vol. 9(3), pages 501-533.
    2. Martin S Eichenbaum & Sergio Rebelo & Mathias Trabandt, 2021. "The Macroeconomics of Epidemics [Economic activity and the spread of viral diseases: Evidence from high frequency data]," The Review of Financial Studies, Society for Financial Studies, vol. 34(11), pages 5149-5187.
    3. Marco Pagano & Josef Zechner, 2022. "COVID-19 and Corporate Finance [The risk of being a fallen angel and the corporate dash for cash in the midst of COVID]," The Review of Corporate Finance Studies, Society for Financial Studies, vol. 11(4), pages 849-879.
    4. Davide Pettenuzzo & Riccardo Sabbatucci & Allan Timmermann, 2020. "Cash Flow News and Stock Price Dynamics," Journal of Finance, American Finance Association, vol. 75(4), pages 2221-2270, August.
    5. Andrew Atkeson, 2020. "What Will Be the Economic Impact of COVID-19 in the US? Rough Estimates of Disease Scenarios," NBER Working Papers 26867, National Bureau of Economic Research, Inc.
    6. Viral V Acharya & Sascha Steffen, 2020. "The Risk of Being a Fallen Angel and the Corporate Dash for Cash in the Midst of COVID," The Review of Corporate Finance Studies, Society for Financial Studies, vol. 9(3), pages 430-471.
    7. Bliss, Barbara A. & Cheng, Yingmei & Denis, David J., 2015. "Corporate payout, cash retention, and the supply of credit: Evidence from the 2008–2009 credit crisis," Journal of Financial Economics, Elsevier, vol. 115(3), pages 521-540.
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    Citations

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    Cited by:

    1. Dutordoir, Marie & Shemesh, Joshua & Veld, Chris & Wang, Qing, 2024. "Can existing corporate finance theories explain security offerings during the COVID-19 pandemic?," Journal of Empirical Finance, Elsevier, vol. 79(C).

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    More about this item

    Keywords

    Dividend and buyback suspensions; High frequency data; Financial market distress; Covid-19;
    All these keywords.

    JEL classification:

    • G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy

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