The COVID-19 shock and equity shortfall: Firm-level evidence from Italy

Arbeitspapier

We employ a representative sample of 80,972 Italian firms to forecast the drop in profits and the equity shortfall triggered by the COVID-19 lockdown. A 3-month lockdown generates an aggregate yearly drop in profits of about 10% of GDP, and 17% of sample firms, which employ 8.8% of the sample's employees, become financially distressed. Distress is more frequent for small and medium-sized enterprises, for firms with high pre-COVID-19 leverage, and for firms belonging to the Manufacturing and Wholesale Trading sectors. Listed companies are less likely to enter distress, whereas the correlation between distress rates and family firm ownership is unclear.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: SAFE Working Paper ; No. 285

Classification and Topics

• Classification: Wirtschaft ; Financial Crises ; Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill ; Bankruptcy; Liquidation
• Subject: COVID-19 ; pandemics ; losses ; distress ; equity ; recapitalization

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Carletti, Elena ; Oliviero, Tommaso ; Pagano, Marco ; Pelizzon, Loriana ; Subrahmanyam, Marti G.
• Event: Veröffentlichung
• (who): Leibniz Institute for Financial Research SAFE
• (where): Frankfurt a. M.
• (when): 2020

Further information

• Handle: http://hdl.handle.net/10419/222964
• URN: urn:nbn:de:hebis:30:3-552455
• Last update: 10.03.2025, 11:45 AM CET