Firms’ solidity before an exogenous shock: Covid-19 pandemic in Italy

Stefano Costa, Federico Sallusti, Claudio Vicarelli and Davide Zurlo

Economic Analysis and Policy, 2022, vol. 76, issue C, 946-961

Abstract: In this paper we study the structural robustness of the Italian business system, using the Covid-19 pandemic as an exogenous event to test it. To this aim, we use the ROC (Receiver Operating Characteristics) methodology, quite new for economics, to classify Italian firms according to their economic solidity, obtaining a taxonomy based on a wide set of characteristics. Our results show that the number of “Solid” firms is less than one-fifth of all Italian enterprises but they represent the lion’s share in terms of employment and value added. “Fragile” and “At Risk” firms, albeit much less relevant for the creation of value added, account for over one-third of total employment, so they may be a worrisome issue for policymakers. Solidity conditions have clearly both a size and sector-related dimension: At Risk and Fragile conditions prevail among firms of smaller economic size (a broad definition of firm size) and among those operating in Construction and Other services. Finally, we find that factors such as firms’ performance, and internal and external organization, although significant, play a less relevant role than economic size and digitalization/innovation in determining Italian firms’ resilience to exogenous shocks such as the Covid-19 one.

Keywords: Covid-19; ROC analysis; Economic solidity to pandemic (search for similar items in EconPapers)
JEL-codes: F61 L25 L60 L80 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0313592622001746
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecanpo:v:76:y:2022:i:c:p:946-961

DOI: 10.1016/j.eap.2022.10.007

Access Statistics for this article

Economic Analysis and Policy is currently edited by Clevo Wilson

More articles in Economic Analysis and Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().