Iranian Journal of Accounting, Auditing and Finance

Iranian Journal of Accounting, Auditing and Finance

The Impact of the COVID-19 Crisis on Corporate Performance: The Moderating Role of Cash and Human Resources

Document Type : Original Article

Authors
Najmeh Hajian
Mahdieh Yazdanbakhsh
Department of Accounting, Khatam university, Tehran, Iran
10.22067/ijaaf.2026.47547.1584
Abstract
The main objective of this study was to examine the impact of the COVID-19 crisis on firms’ financial and market performance. The study employed quarterly data from a sample of firms listed on the Tehran Stock Exchange, covering 22 quarters 11 quarters before the COVID-19 crisis and 11 quarters during the pandemic. In total, 2,310 firm-quarter observations were analyzed using panel data methods in EViews 13 software. The findings indicated that during the quarters affected by COVID-19, the pandemic had a significant negative effect on the operating profit ratio and return on assets. In contrast, due to the inflationary conditions induced by the pandemic, COVID-19 exerted a significant positive effect on stock prices and, consequently, on firms’ market performance. Moreover, the results showed that adequate cash holdings mitigate the adverse effects of COVID-19 on both financial and market performance, suggesting that sufficient liquidity can serve as a financial buffer during crises. Conversely, a larger workforce amplifies the negative effect of COVID-19 on financial performance, given that COVID-19 is a human-centered crisis, while it does not influence the relationship between COVID-19 and market performance. Beyond confirming the expected negative impact of the COVID-19 crisis on firms’ financial performance, the findings highlighted two novel contributions. First, they showed that maintaining adequate cash holdings can serve as a defensive shield for firms during crises. Second, they revealed that a larger workforce may intensify the adverse effects of human-centered crises, such as the COVID-19 pandemic. Accordingly, the study suggested that firms should prioritize holding sufficient cash reserves as well as implementing human resource policies—such as training, preparedness, and succession planning—to better withstand future crises.
Keywords
Cash Resources
Corporate Financial Performance
Corporate Market Performance
COVID-19 Crisis
Human Resources
Subjects
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