Information sensitivity of corporate bonds: Evidence from the COVID-19 crisis

The role of government policies for Italian firms during the COVID-19 crisis

“…Many recent papers have investigated the firm-level effects of the COVID-19 pandemic (e.g., Shen et al, 2020 ; Arnold and Rhodes, 2021 ; Doruk et al, 2021 ; Huang et al, 2021 ; Carter et al, 2022 ; Tchuigoua et al, 2022 ; Hsu and Yang, 2022 ; Kumar and Zbib, 2022 ). These effects could have been influenced by government incentives, which have played a key role in firms ( Songling et al, 2018 ; Minh and Ngoc, 2021 ), especially during the recent COVID-19 crisis ( Tarkom, 2021 ).…”

COVID-19 and the Economy: Summary of research and future directions

“…* Response time and the size of stimulus package matter. (324) Information sensitivity of corporate bonds: Evidence from the COVID-19 crisis Arnold and Rhodes (2021) * Explore changes in corporate bond sensitivity to firm operating leverage throughout the COVID-19 crisis. * Operating leverage measures firm exhibit to adjust operating inputs given a change in sales.…”

“…find that Islamic bonds offered safe havens in the bond markets and that spillovers effects between conventional and Islamic bond markets became intense during the pandemic. In the corporate bond markets, Arnold and Rhodes (2021) find that bond investors discriminate based on operating fundamentals such as operating leverage. Post Federal Reserve credit infusions, spreads of unstable firms with high operating leverage increased and other firms decreased.…”

Market operating leverage and expected stock returns

“…Arnold and Rhodes (2021) examined the impact of the COVID‐19 crisis on firms with high OL. These firms' bonds were discriminated by investors because of their inability to adjust their inputs rapidly.…”