COVID-19 Pandemic, Corporate Investment and the Real Option Value

IF 2.8 3区经济学 Q2 BUSINESS

Emerging Markets Finance and Trade Pub Date : 2023-09-04 DOI:10.1080/1540496X.2023.2250907

Chao Yan, Ziyi Zhang, Yi Feng

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Abstract

ABSTRACT The outbreak of COVID-19 has a huge negative impact on the firms’ business activities. This paper investigates the effects of COVID-19 pandemic on corporate investment and firm value from the real option perspective. Based on the real options-based model (ROM) proposed by Zhang (2000), we find that COVID-19 crisis accelerates low-profitability firms to reduce investment and exercise put options timely, thereby increasing the value of put options. This finding mainly exists in areas where the COVID-19 pandemic was worse and firms that did not receive government subsidies related to COVID-19. We also find that the value of put options is more pronounced for non-state-owned enterprises and firms with higher internal control quality. However, we do not find the change of growth option value of high-profitability firms during the COVID-19, which indicates that it is difficult for high-profitability firms to grasp the investment expansion opportunities under the pandemic. Our study sheds light on the applicability of ROM and the importance of real option in firm valuation under the major public emergencies.

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新冠肺炎疫情、企业投资与实物期权价值

新冠肺炎疫情对企业经营活动产生了巨大的负面影响。本文从实物期权的角度考察新冠肺炎疫情对企业投资和企业价值的影响。基于Zhang(2000)提出的基于实物期权的模型(ROM)，我们发现COVID-19危机加速了低盈利企业减少投资并及时行使看跌期权，从而增加了看跌期权的价值。这一发现主要存在于疫情严重的地区和没有获得政府相关补贴的企业。我们还发现，非国有企业和内部控制质量较高的企业，看跌期权的价值更为显著。然而，我们没有发现高盈利企业在新冠肺炎期间的成长期权值变化，这表明高盈利企业很难把握疫情下的投资扩张机会。我们的研究揭示了ROM的适用性和重大突发公共事件下实物期权在企业价值评估中的重要性。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Emerging Markets Finance and Trade Multiple-

CiteScore

7.80

自引率

10.00%

发文量

182

期刊介绍： Emerging Markets Finance and Trade publishes research papers on financial and economic aspects of emerging economies. The journal features contributions that are policy oriented and interdisciplinary, employing sound econometric methods, using macro, micro, financial, institutional, and political economy data. Geographical coverage includes emerging market economies of Europe, the Balkans, the Middle East, Asia, Africa, and Latin America. Additionally, the journal will publish thematic issues and occasional special issues featuring selected research papers from major conferences worldwide.