Fear of Virus or of Competitors? The Decision Rationales of Financial Managers Under COVID-19

This paper surveyed 422 financial managers before the number of novel coronavirus (COVID-19) infections in China peaked and used path analysis to study the risk decision-making mechanisms of financial managers. The study found that whether financial managers developed coping strategies depends on their assessment of potential business revenue losses. There are two transmission paths: the direct effect refers to the risk perception directly caused by COVID-19, while the indirect effect refers to managers’ fear that they will not make timely adjustments or will make judgment errors, resulting in the loss of competitive advantage. It is worth noting that the indirect effect exceeds the direct effect, which indicates that financial managers are more rational than ordinary people in dealing with COVID-19, that they are relatively more concerned about competitor changes, and that they may even view COVID-19 as an important opportunity to obtain a better competitive position.