Review and Analysis of Halling Yu and Zechners Study

  • 12 Pages
  • Published On: 07-12-2023

Summary of the paper

The changes in the business environment and the outbreak of the Covid19 situation have disrupted several business operations. The study, “How Did COVID-19 Affect Firms’ Access to Public Capital Markets? ” by Halling, Yu and Zechner (2020) has focused towards identifying the means through which the emergence of the pandemic situation has affected the firms’ access to the public capital markets and the implications of the same. In this connection, the current discussion would review the research study and develop cognition on the various aspects that have been contributing towards the impending adverse situation while creating a negative impact on the firms’ accessing the public capital markets. The discussion would summarize the research paper, critically examine the methodology that was used in the paper, identify and analyze the findings from the study, the contributions of the paper, the strengths and weaknesses of the paper and the lessons learnt through the assessment.

The research paper aimed towards identifying the different areas of impact that was created by the pandemic situation on the Public Capital Markets. Existing evidences of the bond maturities in economic downturns are well expressed in the paper through examining the bonds that are published by the firms in the time of normal times and the pandemic situation. During the research it was witnessed that asset tangibility holds a negative impact on the spreads in the normal times. However, during the outbreak of the Covid19 firm’s capital and other fixed assets are largely affected through the lockdown measures and inflexibility of operations.


On the other hand, the equity issues painted a different picture with pitfalls in the first four weeks and then reforming their position in the capital markets. Through the research it was observed that the bonds were mostly issued in the time of the pandemic situation rather than the equity. the research paper devised a clear view on the manner in which the public capital markets are affected by the sudden emergence of the Covid19 situation and the manner in which the firms secured their sustenance and growth in the global markets. However, it has been observed that the research did not devise clear aims, objectives or research questions which have significantly affected the quality of the study and the information that it focuses towards sharing.

Ridder (2017) claims that the identification of clear objectives and rationale for a study is integral towards guiding a research towards the significant outcomes. In this connection, it has been observed that the paper failed to develop a concise objective, research question or hypothesis which significantly affected the capability of the study in making the target audience aware of the concern or the rationale for conducting the research. However, it has been observed that the research made good use of past literatures and instances that indicated the impact of major events which has created a drastic impact on the capital markets of the firms.

It has been observed that firms take the initiative of collecting capital through diverse range of devises like equity, shares or bonds. In this connection, it has been observed through the past literatures that different mega events around the world have significantly affected the capability of the firms in improving the degree of their capital collection methods. According to Gummesson (2017), reference made to wider range of available and authentic sources of information in the literature review part supports a researcher in developing an incoherent study while predicting or forecasting the significant outcomes as per the goals. Therefore, the study has made use of wider range of literature, both quantitative and qualitative, in order to identify the concerns and the manner in which the same might be studied in the context of the fluctuations in the capital markets.

The Contribution of the study

The research paper is focused towards improving the knowledge on issuance of bonds and the characteristics of the bond issuing businesses. The study was taken with the purpose of conducting an in- depth behavioral research on the nature and types of approach that are applied by the firms in the time of crisis to the public capital markets. The research also provides evidence on the capital provisions that are provided by the US financial markets to the firms at the outbreak of the Covid19 situation. The researchers developed a coherent study based on the assessment of the firm characteristics and their differences and the manner in which the primary corporate bond market has changed in the COVID-19 crisis.

The study would be beneficial for the investors who are planning to make investments on corporate bonds. The identification of the nature of steps that are taken by the firms and the manner in which the bonds and equities are made available in the markets would significantly assist the investors in developing cognition on the areas where they might make their investments. Moreover, the research would support the businesses in developing capabilities in issuing the bonds and equities.

The research also identified the determinants like maturity rates where it was witnessed that firms created longer maturities in order to sustain the financial upheaval that has been occurring in the societies due to the sudden outbreak of the Covid19 situation. The research would also make an extensive contribution towards educating the students on the different strategies that are used by the firms in situations like financial unrest. The clear assessment of the different interventions that are used by the firms in order to maintain their sustenance in the financial unrest is a critical factor that might be considered by the accountancy students which would support the same in improving their future possibilities while getting hold of an employment opportunity.

Evaluation of the Research Methodology used in the Study

The research methodology that was used in the study was Primary study quantitative and was based on a period of time starting from calendar week 12 through 20 in the year 2020. The justification for selecting week 12 was provided by the researcher stating that it was the time when the social activities were regulated and banned in the European countries. The data was collected on a monthly basis. On the other hand, the data was collected till week 20 in order to retrieve authentic and available data on bond and equity issuances. Therefore, it might be stated that the researchers took the initiative of utilizing the most current and authentic data at the time when the research was being written. Ridder (2017) states that authenticity, currency and relevance of the data that is presented in the research papers guide a study towards achieving the objectives and goals.

However, it has been observed that the current research study did not prescribe any specific objective, goals or hypothesis. However, the use of relevant literature has contributed towards improving the scope of the study while guiding the same towards identifying the determinants that has been affecting the capital markets for the firms. The researchers established a cross-sectional study based on firms where data from the first five months of the years 2017, 2018, and 2019 were used with the purpose of differentiating with that of the data found in the year 2020. Flynn and Korcuska (2018) states that a cross-sectional differences-based study clearly examines any phenomena that have changed over the times while deriving different determinants from close evaluation of the data. In this connection, the phenomenon of fluctuations in the public capital markets and its impact on the firms were observed by the researchers in order to develop a concrete understanding on the complete picture. Again, the use of systematic primary references has assisted the researchers in developing a coherent study.

The researchers also used primary data bases for retrieving important information on the different areas. SDC Platinum database was utilized for evaluating the new bond and equity related concerns whereas the Compustat database was used for identifying the balance sheet items. The utilization of the primary data bases has enabled the researchers in developing efficient cognition on the areas of concerns while comparing the data between the years 2017- 2020. Alshehhi, Nobanee and Khare (2018) opined that the utilization of the primary data sets supports the researchers in developing clear cognition through the availability of wider amount of information and thereby guide the study towards a significant outcome. Therefore, it has been observed that the utilization of the primary research instruments would be supportive towards increasing the efficiency of the current study while guiding the same towards the significant and unbiased outcomes.

The researchers identified their sample as nonfinancial, publicly listed firms while acquiring data on their securities. The final sample of reflected 286 bond issues and 123 equity issues during the COVID-19 crisis along with 60 bond issues and 169 equity issues in the pre-COVID-19 weeks. The proportion of bond issues before the pandemic and during the pandemic significantly indicates the concerns that are being encountered by the firms in accessing the public capital markets in the time of the crisis which led the same towards issuing the bonds. The researchers took the initiative of researching on the principal amount, spread, coupon rate, maturity, rating, and industry group for every bond issues.

On the other hand, for every bond issuer the researchers seemed to gather significant research data on past issuance activities from the SDC Platinum database since 2009. The activities supported the researchers in developing a clear cognition on the behavior of the issuers of the bonds and the people to whom the bonds are being issued. Moreover, for evaluating every equity issue the researchers developed a clear cognition on the nature being IPO or a SEO. Finally, the Compustat balance sheet variables were used with the purpose of calculating and evaluating the values and developing the findings of the study. It might be stated that the research process that was adopted by the researchers were systematic and rational which has supported in guiding the study towards its outcomes. Korcuska (2018) stated that the systematic development of methodology enables a researcher in developing coherent research study while improving the prospects of guiding the same towards significant outcomes.

The researchers utilized a range of primary data collection tools and used a range of determinants with the purpose of gathering insights on the problem area. Moreover, the use of cross-sectional differences based phenomenal study empowered by current, relevant and authentic information might be considered as an important advantage of the research study.

Analysis of the Result and Conclusion

The findings from the research data reflected that issuance activity have increased considerably in between the 12th and 20th weeks in the year 2020 and even more than in the years 2017- 2019. Moreover, it was observed through the findings that the first and last three weeks of the crisis encountered a proactive issuance activity. The aspects have significantly supported in ide5ntifying the areas through which the organizations and firms concentrated on draining capital for maintaining their continuity even in the absence of the fixed assets. Exhibits were produced by the researchers with the purpose of efficient reference of the empirical data that was analyzed by the same. Alshehhi, Nobanee and Khare (2018) stated that exhibition of the data in clear tabular formats contributes towards enhancing the overall quality of a study while creating a pathway for finding the sources of analysis made in a research study.

Moreover, Halling, Yu and Zechner (2020) opined that the use of exhibits in a research study improves the clarity and authenticity of the research study while contributing towards the understanding and cognitive elements of the readers. Interpretation on the nature and rationale for the issuance activities were made by the researchers in order to develop a clear understanding on the areas of change. It was observed that the firms issued the bonds and equities in the first and last three weeks while reducing their issuances in the following weeks in order to address the economic uncertainty related concerns. In economies with continuous fluctuations, the financial decisions that are made by the firms contribute towards their sustenance and growth in the international markets.

Likewise, the researchers indicated a trait or behavior of the issuances that were made by the firms based on the assessment of the financial situation that is being faced by the businesses. It has been observed that the researcher used graphical representations as well with the purpose of clearly illustrating the resultants while driving the attention of the readers towards different integral findings from the analysis. Korcuska (2018) stated that graphical representation of facts and findings support a researcher in providing a lucid image of the different findings that were made during the study and thereby correlate the same with the research objectives for influencing the outcomes.

Therefore, the use of diverse range of tables and charts has significantly supported in illustrating the overall findings from the study in a nutshell. On the other hand, the researcher conducted a thematic analysis of the different findings from the study while categorizing the topic areas under well-constructed themes. The thematic presentation of the findings has e5ssentially supported in developing a clear cognition on the diverse determinants and variables that were utilized in the study. Ridder (2017) stated that thematic presentation of the findings while categorizing the research results into different themes supports in simplifying the outcomes and guide a study towards unbiased outcomes. Therefore, the use of thematic presentation like issuance activity in bond markets, issuance activity in equity markets and determinants of bond spreads has contributed towards improving the clarity on aspects of bonds, equities and spreads in the event of the pandemic situations.

Strengths and limitations of the paper

The major strength of the paper is specifically based on the primary research methodology that was adopted by the researchers. On the other hand, the research study produced different exhibits of the analysis which has significantly contributed towards the lucid understanding on the nature and contexts of the capital markets and interventions that are used by the firms for maintaining stability and sustenance in times of crisis.

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However, the research paper is limited by the insufficiency of clear objectives and structure. On the other hand, it has been observed that the study did not produce any concerns that are being faced by the firms while adopting to the changing business environments or the interventions that might be considered for improving their prospects of sustaining in the highly competitive and fluctuating financial markets. The research was made on the basis of an exploratory study whereas it could have been an explanatory research which would support in identifying the causal relationship.

The future research

The future research might be conducted on the issues that are being faced by the business firms in surviving the crisis conditions that might be faced by the same in case of a sudden change in the business environments. The identification of the areas of concerns and the interventions would act as successor to the current study. Moreover, in the future researches the goals, objectives, research questions must be made clearly with the purpose of providing the readers with a lucid understanding on the topic area and the purpose for the research. Clarity of the goals, objectives and hypothesis would not only develop a coherent understanding on the areas of the study, but also support the researchers in developing a systematic approach towards detailing the study outcomes.

The current study simply explored the different aspects that are faced by the firms while getting access to the public capital markets in the context of the pandemic. However, the future researches might develop a clear view on the different concerns and interventions that might be used by the businesses in order to sustain in the crisis situation. The identification of different strategic financial approaches through which the impact can be reduced would support the financial businesses in developing coherent processes. Therefore, it might be stated that the future researchers might consider the identification of the different challenges and interventions with the purpose of improving the scope of the study.


Alshehhi, A., Nobanee, H., &Khare, N. (2018). The impact of sustainability practices on corporate financial performance: Literature trends and future research potential. Sustainability, 10(2), 494.

Flynn, S. V., &Korcuska, J. S. (2018). Credible phenomenological research: A mixed‐methods study. Counselor Education and Supervision, 57(1), 34-50.

Gummesson, E. (2017). Case theory in business and management: reinventing case study research. Sage.

Halling, M., Yu, J., &Zechner, J. (2020). How Did COVID-19 Affect Firms’ Access to Public Capital Markets?. The Review of Corporate Finance Studies, 9(3), 501-533.

Ridder, H. G. (2017). The theory contribution of case study research designs. Business Research, 10(2), 281-305.

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