Abstract
We investigate the relationship between the firms' cash holdings and public health risks. We find that in comparison to firms whose employees can work remotely, firms with more on-site employees increase cash during the H1N1 pandemic. This increase in cash is larger for firms that are more vulnerable to liquidity shocks. These firms increase cash by selling investments, reducing capital expenditures and dividends. During the pandemic, delistings, default risk, and volatility increase for firms with more on-site employees. We find similar results during the COVID-19 pandemic. These findings suggest that firms manage cash to remain solvent when public health risks increase