Firm Coping Strategies during the COVID-19 Pandemic: Evidence from Western Balkan Countries

Abstract

In this paper we analyze pre-pandemic firm characteristics that are significantly associated with different coping strategies used by firms in order to deal with the consequences of the COVID-19 pandemic. The data we use come from the sixth round of the World Bank Business Environment Enterprise Performance Survey (BEEPS VI) for a sample of five Western Balkan countries: Albania, North Macedonia, Montenegro, Bosnia and Herzegovina and Serbia, combined with the COVID-19 Follow up Enterprise Surveys conducted by the Enterprise Analysis unit of the World Bank Group. We find that pre-pandemic firm characteristics are significantly associated with certain positive outcomes such as laying off less employees, filing less for insolvency or bankruptcy and adjusting business operations to the newly created circumstances. Furthermore, we find small firms to be particularly at a disadvantage when coping with the pandemic. The results of this paper contribute to the growing literature on the economic impact of COVID-19 and guides policy making in order to tailor government support to those segments of the firm population that stand to benefit the most from such aid.

Keywords:COVID-19 pandemic; firm performance; Western Balkans; SMEs; firm liquidity; financial constraints

DOI: 10.7176/EJBM/14-18-03

Publication date:September 30^th 2022