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Corporate liquidity, supply chain and cost issues awareness within the Covid-19 context: evidence from US management reports’ textual analysis

Fassas, Athanasios; Bellos, Sotirios; Kladakis, George


Athanasios Fassas

Sotirios Bellos


The purpose of this study is to assess the management responses and intentions of 3,279 US firms from all industries, before and after the coronavirus outbreak, to identify the level of managerial concern about specific financial issues and potential economic costs of the COVID-19 pandemic.

This paper uses textual analysis of official management reports to search for specific single words in five domains related to corporate finance and governance. This paper focuses on the relative frequency of single words using a weighting scheme that adjusts for document length and for the inverse document frequency. This paper then uses t-tests to investigate the univariate differences across groups of reports before and after the US stock market crash in February 2020.

The applied textual and empirical analysis provides evidence that firms’ primary concerns relate to the disruption in supply chains, liquidity need and coronavirus-led recession. This paper also shows that the main cost reduction measure they are considering is salary reduction, rather than workforce reduction. This paper also shows evidence that firm managers are rather swift to provide coronavirus-related information in the US Securities and Exchange Commission (SEC) corporate filings.

Practical implications
The findings provide a primary view of the directions, on which US firms will move in the near future, and thus, they can be used as tools for the formulation of appropriate government policies in the corresponding sectors, which could mitigate the economic risks related to the pandemic. At the business level, the disseminated knowledge can assist firms either in the same sector or in similar/related sectors to “locate” themselves within the map of the pandemic and to adjust or align correspondingly their strategies and decisions as they will have a view of the bigger picture.

The empirical analysis divulges US firms’ management primary concerns after the COVID-19 outbreak, and thus, offers insights to the processes taking place in the US business community and the formulating new corporate and economic reality.


Fassas, A., Bellos, S., & Kladakis, G. (2021). Corporate liquidity, supply chain and cost issues awareness within the Covid-19 context: evidence from US management reports’ textual analysis. Corporate governance : the international journal of business in society, 21(6), 1155-1171.

Journal Article Type Article
Acceptance Date Feb 9, 2021
Online Publication Date Apr 7, 2021
Publication Date Sep 22, 2021
Deposit Date Nov 2, 2021
Journal Corporate Governance: The International Journal of Business in Society
Print ISSN 1472-0701
Electronic ISSN 1472-0701
Publisher Emerald
Peer Reviewed Peer Reviewed
Volume 21
Issue 6
Pages 1155-1171
Keywords Covid-19
Public URL

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