The Effects of Leverage and the COVID-19 Crisis on Brazilian Company Investments

Autores

Duterval Jesuka; MICHELE APARECIDA CUNHA; Eunice Henriques Pereira Vilela; Fernanda Maciel Peixoto

Dados bibliográficos

Ano: 2026

Local de publicação: Management international

ISSN/ISBN: 1206-1697

DOI: 10.59876/a-gk6b-zm2n

Resumo

This study examines how financial and operational leverage, along with the COVID-19 crisis, influenced corporate investment during crises. Using panel data from 776 firms listed on Brazil’s stock exchange (2010–2022) and fixed-effects regression models, we find that both leverage types and the pandemic significantly reduced investment levels. In contrast, firm growth and revenues positively affect investment decisions, while size and age also play important roles. The results indicate that highly leveraged firms with growth potential tend to reduce investments and rely more on operating revenues during crises. The study highlights the importance of cautious financial strategies for leveraged firms in emerging economies during pandemic shocks.