Corporate Flexibility in a Time of Crisis / John W. Barry, Murillo Campello, John Graham, Yueran Ma.

Format:

Book

Author/Creator:

Barry, John W.

Contributor:

National Bureau of Economic Research.

Campello, Murillo.

Graham, John.

Ma, Yueran.

Series:

Working Paper Series (National Bureau of Economic Research) no. w29746.

NBER working paper series no. w29746

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2022.

Summary:

We use the COVID shock to study the direct and interactive effects of several forms of corporate flexibility on short- and long-term real business plans. We find that i) workplace flexibility, namely the ability for employees to work remotely, plays a central role in determining firms' employment plans during the health crisis; ii) investment flexibility allows firms to increase or decrease capital spending based on their business prospects in the crisis, with effects shaped by workplace flexibility; and iii) financial flexibility contributes to stronger employment and investment, in particular when fixed costs are high. While the role of workplace flexibility is new to the COVID crisis, CFOs expect lasting effects for years to come: high workplace flexibility firms foresee continuation of remote work, stronger employment recovery, and shifting away from traditional capital investment, whereas low workplace flexibility firms rely more on automation to replace labor.

Notes:

Print version record

February 2022.