COVID-19 Pandemic and Enterprise Financial Performance: Aggregate, Regional, and Sectoral Evidence from Poland

ABSTRACT

This paper investigates how the COVID-19 pandemic and resulting government support affected the financial performance of Polish firms at the aggregate, regional, and sectoral levels. The results of our dynamic econometric model showed that firm performance at the aggregate level declined in 2020Q1 but recovered in 2021Q1. The pandemic negatively affected western firms but not eastern ones. Manufacturing and transport & logistics firms suffered temporarily in early 2020 but recovered in 2021Q1. Construction and trade & repair firms remained resilient. Overall, the pandemic and government support affected the sectors and regions differently, with varied policy implications.

KEYWORDS:

• Covid-19
• Europe
• financial performance
• Poland
• resilience

JEL CLASSIFICATION:

• R12
• G30
• H25

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1. As a robustness check, we estimated the models using the IV-within estimator and pooled OLS. The results are qualitatively very similar and available from the authors upon request.

2. Data sourced from ZUS (Polish Social Security Office).

Additional information

Funding

This work was supported by the National Science Centre under Grant no. 2017/27/B/HS4/00782.

Notes on contributors

Paweł Gajewski

Paweł Gajewski is an Associate Professor at the University of Łódź, where he received his ph.D. in Economics. His research interest include regional and spatial economics as well as macroeconomics and the issues related to monetary integration. He is conducting his research with support of the Polish National Science Centre. He worked for the National Bank of Poland and the Institute of Economic Sciences of the Polish Academy of Sciences. He has published papers in the International Review of Financial Analysis, European Planning Studies, Emerging Markets Finance and Trade, Eastern European Economics and Applied Economics Letters, among others. He was a senior editor in the International Journal of Emerging Markets.

Ali M. Kutan

Ali M. Kutan is a Distinguished Research Professor of Economics and Finance at Southern Illinois University at Edwardsville. He received his Ph.D in Economics from Arizona State University. His research interests include international finance, financial markets and institutions, and financial aspects of economic development. His recent work focuses on emerging economies, including Central and Eastern European economies and China. His research is supported through several agencies, including The British Council, The National Council for Eurasian and East European Research, the U.S. Department of Education, and the William Davidson of Institute of the University of Michigan Business School. He was a visiting scholar at the Economic Research Department of the Federal Reserve Bank of St. Louis. He is currently the Director of Research and Development of the Society for the Study of Emerging Markets. He served as a consultant to the World Bank, Asian Development Bank, US Commerce Department, and private companies. He has published extensively in over 160 peer review economics and finance journals. He is the editor of Borsa Istanbul Review and co-editor of Economic Systems. In addition, he serves as an associate editor of International Review of Financial Analysis and Economic Modelling