1811467970  

Corporate Debt and Stock Returns : Evidence from U.S. Firms during the 2020 Oil Crash / Rabah Arezki

Cho, Caleb [SonstigeR] ; Nguyen, Ha [SonstigeR] ; Nguyen, Kate [SonstigeR] ; Pham, Anh [SonstigeR]

Englisch

Washington, D.C : The World Bank, 2022

1 Online-Ressource (24 pages)

Erscheint auch als: Druck-Ausgabe- Arezki, Rabah: Corporate Debt and Stock Returns: Evidence from U.S. Firms during the 2020 Oil Crash. - Washington, D.C. : The World Bank, 2022

DOI: 10.1596/1813-9450-10079

*Corporate Debt ; Corporate Governance ; Energy ; Energy Markets ; Energy Policies and Economics ; Oil and Gas ; Oil Company Debt ; Oil Firms Stock Returns ; Oil Markets ; Oil Price Fluctuation ; Oil Stocks ; Private Sector Development ; Private Sector Economics ; Volatility

This paper explores the effect of oil price fluctuations on the stock returns of U.S. oil firms using an identification strategy through heteroskedasticity, exploiting the 2020 oil price crash. The results are twofold. First, a decline in oil prices significantly reduces oil firms' stock returns. On average, a 1 percent decline in oil prices leads to a 0.44 percent decline in stock prices. Second, firm debt appears irrelevant in mediating the effect of oil prices on oil firms' stock returns. Moreover, the muted role of debt was not likely caused by the liquidity backstop provided by the Federal Reserve

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