The Role of Financial Flexibility on Enterprise Sustainable Development during the COVID-19 Crisis—A Consideration of Tangible Assets

Sustainability

Bao-Guang Chang¹  Kun-Shan Wu²  Xiaodong Teng³ 

[1] Department of Accounting, Tamkang University, Taipei 251301, Taiwan;Department of Business Administration, Tamkang University, Taipei 251301, Taiwan;Intelligent Accounting Research Center, Shandong University of Finance and Economics, Jinan 250014, China;

关键词: COVID-19;    financial flexibility (FF);    return on assets (ROA);    manufacturing industry;    semiconductor industry;    sustainable development;   

DOI  :  10.3390/su13031245

来源: DOAJ

【 摘 要 】

Financial flexibility refers to the ability of a firm to respond effectively to unanticipated shocks to its cash flows or its investment opportunities and is a key factor in the sustainable development of enterprise. This article explores the effect of financial flexibility on the enterprise performance of Taiwan’s manufacturing industry during the COVID-19 pandemic. Data for the first and second quarter of 2020 from companies listed on the Taiwan Stock Exchange were collected and analyzed. The results indicate that for listed manufacturing companies on the Taiwan Stock Exchange, financial flexibility has a significant and positive effect on enterprise performance (return on assets, ROA), particularly in the asset-heavy manufacturing industry. However, financial flexibility has no significant effect on the enterprise performance of the asset-light manufacturing industry or the semiconductor industry. This study also show evidence that Taiwan’s asset-light manufacturing industry suffered the most from the COVID-19 crisis, which is not conducive to its sustainable development. In summary, the results show that Taiwan’s manufacturing industry has poor financial flexibility and one of the worst ROA during the COVID-19 pandemic. Based on the results of this research, effective suggestions to rationally retain financial flexibility and pay more attention to liquidity risk management for sustainable development are proposed for Taiwan’s manufacturing industry.

【 授权许可】

Unknown