The Impact of Cash Flow Flexibility and Covid-19 Pandemic on Investment Decisions of Listed Companies in Vietnam

Abstract

The research paper uses the balance sheet data of 98 companies listed on the Ho Chi Minh Stock Exchange (HNX) and the Hanoi Stock Exchange (HSX) for the period 2010-2021 and the FGLS method to examine the impact of cash flow flexibility and Covid-19 on these companies’ investment decisions. The results show that the Covid-19 outbreak caused a significant decrease in these companies’ investment decisions, and the high cash flow flexibility reduced the negative impact on the companies’ investment activities during the pandemic. The research results will help the companies have optimal policies for cash management to make investment decisions when facing non-financial shocks.