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Fahlenbrach, R., Rageth, K., & Stulz, R. M. (2021). How Valuable Is Financial Flexibility When Revenue Stops? Evidence from the COVID-19 Crisis. The Review of Financial Studies, 34, 5474-5521.
https://doi.org/10.1093/rfs/hhaa134

has been cited by the following article:

• TITLE: Do Financially Constrained Companies Increase More Leverage during COVID-19?

  AUTHORS: Lixu Xie

  KEYWORDS: Capital Structure, Leverage, Financing Constraints, COVID-19

  JOURNAL NAME: Open Journal of Business and Management, Vol.13 No.6, October 17, 2025

  ABSTRACT: This paper examines the heterogeneous effects of COVID-19 on financial leverage for companies with different degrees of financing constraints using a dynamic panel regression model. It finds that the COVID-19 has had a great effect on company capital structure choices, and compared to unconstrained companies, financially constrained companies increase more leverage (mainly short-term leverage) during COVID-19 period. Further study confirms that credit supportive policies implemented by the government in the period benefit constrained firms, and enable them more convenient access to obtain more external short-term loans than usual.