Analyzing the effects of COVID‐19 pandemic on the financial performance of Chinese listed companies

Abstract

This study is aimed at analyzing the effects of COVID-19 pandemic on the financial performance of Chinese listed companies. We applied pooled ordinary least square (OLS) regression as a baseline methodology to determine the effects of COVID pandemic on the financial performance of Chinese listed companies. We found that the small- and medium-sized companies are most affected by this pandemic, in addition to that our analysis has revealed that serious-impact areas and industries which were worst hit by the COVID-19 experienced a sharper decline in financial performance as compared to other industries. The findings of this study have broad implications for policymakers, as it is evident that governments, banks, regulatory bodies, and central banks must combine forces to tackle the financial and economic impacts of COVID-19 crises. They should come up with comprehensive policies to tackle the adverse impact of such crises in the future as well. Actions such as proving loans and rescheduling existing loans to worst-hit sectors such as tourism, airline industry, etc. are starting point. The disclosure of facts and figure by officials regarding the status of health care number of infections can reduce the chances of panic situations in the future.