IDEAS home Printed from https://ideas.repec.org/a/kap/rqfnac/v65y2025i1d10.1007_s11156-023-01208-6.html
   My bibliography  Save this article

Opioid crisis effects on local firms’ risk

Author

Listed:
  • Sabri Boubaker

    (EM Normandie Business School, Métis Lab
    International School, Vietnam National University
    Swansea University)

  • Zied Ftiti

    (EDC Paris Business School)

  • Yifan Liu

    (Texas State University)

  • Wael Louhichi

    (ESSCA School of Management)

Abstract

This study investigates the impact of the opioid crisis on local firms’ risk and payout flexibility using a sample of 4094 U.S. firms headquartered in 542 counties. We find that firms headquartered in counties with higher opioid mortality rates are associated with higher risk than those with lower opioid mortality rates. This association is more prominent for states severely inflicted by opioid abuse and firms with very high risk. Moreover, firms headquartered in counties with higher opioid mortality rates use more flexible payout policies that favor share repurchases over dividends than those in counties with lower opioid mortality rates. Further, opioid abuse increases local firms’ risk by increasing labor costs. Besides, the staggered passage of state opioid laws mitigates the impact of opioid abuse on firm risk and payout flexibility. The above findings suggest that the opioid crisis raises local firms’ risk, and they respond with more flexible payout policies to improve financial flexibility.

Suggested Citation

  • Sabri Boubaker & Zied Ftiti & Yifan Liu & Wael Louhichi, 2025. "Opioid crisis effects on local firms’ risk," Review of Quantitative Finance and Accounting, Springer, vol. 65(1), pages 185-217, July.
    • Handle: RePEc:kap:rqfnac:v:65:y:2025:i:1:d:10.1007_s11156-023-01208-6
    DOI: 10.1007/s11156-023-01208-6
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11156-023-01208-6
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s11156-023-01208-6?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:rqfnac:v:65:y:2025:i:1:d:10.1007_s11156-023-01208-6. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.