Corporate Flexibility in a Time of Crisis - Yueran Ma

Finance

Speaker : Yueran Ma

Videoconference

We use a timely survey of US CFOs to explore the impact of three dimensions of corporate flexibility during the COVID-19 crisis. We find that workplace flexibility, namely the ability for employees to work remotely, plays a central role in firms’ employment planning during the health crisis. In addition, investment flexibility allows firms to align capital spending plans with the extent to which they can operate during the crisis. Finally, financial flexibility contributes to stronger employment and investment plans for 2020. These corporate flexibility margins perform independent functions, yet complement each other. In contrast to the role played by workplace flexibility during the 2020 health crisis, we find no such effect during the 2008 financial crisis. Our results have a wide range of implications for the ongoing transformation of the workplace.

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