Shareholder response to pension deficit: evidence from the COVID-19 pandemic

We examine the impact of firms’ pre-crisis pension underfunding on stock returns US firms during COVID-19 market crisis. Unlike prior studies, our study uses pandemic as an exogenous shock to and reports that shareholders remain indifferent underfunding. The remains trivial even after considering possible financial constraints, information asymmetry, mandatory contributions associated with Our findings suggest acknowledge deficit a firm’s true liability only when start affecting earnings cash flows in future.