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Deferring cash commitments to mitigate COVID-19 impact on the service sector: a case study of a transition economy

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  • Ömer Tuğsal Doruk

Abstract

Purpose - This study aims to use a comparative analysis to examine the channel of deferring cash commitments, which can be seen as a strategic solution to mitigate the impact of COVID-19 on Moldova's service sector. Design/methodology/approach - This paper uses the Oaxaca–Blinder decomposition analysis. The World Bank's post-COVID-19 survey is used. The methodology takes into account heterogeneity among firms. Findings - The results of the Oaxaca–Blinder decomposition analysis show that service firms use deferred cash commitments more than industrial firms, corporate governance and their pandemic-related strategies are also effective in the post-COVID Moldovan economy. The results are robust to different modeling alternatives. Originality/value - COVID-19 can be considered a key source of uncertainty for firms, especially those operating in economies where financial frictions occasionally occur in a transition economy. Therefore, this study can shed new light on the impact of COVID-19 on financial strategies in a transition economy.

Suggested Citation

  • Ömer Tuğsal Doruk, 2023. "Deferring cash commitments to mitigate COVID-19 impact on the service sector: a case study of a transition economy," Journal of Money and Business, Emerald Group Publishing Limited, vol. 3(2), pages 197-211, September.
    • Handle: RePEc:eme:jmbpps:jmb-05-2023-0029
    DOI: 10.1108/JMB-05-2023-0029
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    More about this item

    Keywords

    Oaxaca-Blinder decomposition; COVID-19; Moldavian economy; Services sector; Cash commitments; Comparative analysis; G15; G18; Q54;
    All these keywords.

    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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