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Likely winners and losers in upcoming COVID-19 economic crisis – lessons learned from the GFC

Jan Čadil (Unicorn University Research Centre, Prague, Czech Republic and Prague University of Economics and Business, Prague, Czech Republic)
Marek Beránek (Unicorn University Research Centre, Prague, Czech Republic)
Vladimír Kovář (Unicorn University Research Centre, Prague, Czech Republic)

Journal of Entrepreneurship in Emerging Economies

ISSN: 2053-4604

Article publication date: 28 May 2021

Issue publication date: 9 September 2021

424

Abstract

Purpose

The COVID-19 pandemic and subsequent efforts to contain it have started economic downturn that may even surpass the global financial crisis (GFC). The purpose of this study is to uncover the features of enterprises’ resilience during and after an external shock such as the GFC might be helpful in predicting the shock impact on enterprises and setting proper policy measures for the upcoming COVID-19 crisis.

Design/methodology/approach

The authors analysed the impact of the GFC on the entrepreneurial population in/of the Czech Republic using marginal effects method on a large random sample of 4,478 enterprises. In this analysis, the authors defined two groups of enterprises – “winners” and “losers” – based on the company’s dissolution and performance indicators.

Findings

The GFC struck the enterprise population asymmetrically in terms of the enterprises’ characteristics but also in terms of time. Micro and small size companies are the most vulnerable to external shocks such as the GFC. Technological level plays an important role in the recovery phase, especially in the case of manufacturing micro enterprises.

Research limitations/implications

Although there are differences between the GFC and the COVID-19 crisis, the GFC was the only comparable shock in modern history in its global nature, depth and unpredicted occurrence. It can be expected that the impact on enterprises can be partly similar.

Practical implications

Government support of micro size companies should be the priority in the upcoming COVID-19 crisis. Supporting the innovation and technology progress might accelerate the recovery phase after the crisis especially in micro companies as well.

Originality/value

This paper presents interesting insights into the impact of external shocks such as the GFC or COVID-19 on enterprises. It uncovers typical features of “winners” or “losers” of such shocks.

Keywords

Acknowledgements

Compliance with ethical standards: The authors declare that the work described has not been published before; that it is not under consideration for publication in another journal; that the paper has not been previously rejected or withdrawn after review by the Journal of Entrepreneurship in Emerging Economies; that its publication has been approved by all co-authors; and that its publication has been approved by the responsible authorities – tacitly or explicitly – at the institute where the work has been carried out.

Conflict of interest: The authors declare that they have no conflict of interest.

Citation

Čadil, J., Beránek, M. and Kovář, V. (2021), "Likely winners and losers in upcoming COVID-19 economic crisis – lessons learned from the GFC", Journal of Entrepreneurship in Emerging Economies, Vol. 13 No. 4, pp. 575-587. https://doi.org/10.1108/JEEE-10-2020-0374

Publisher

:

Emerald Publishing Limited

Copyright © 2021, Emerald Publishing Limited

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