Abstract
The consequences of COVID-19 will aggravate existing multidimensional risks and reveal new ones. The research gap allows contributing to recognizing the exogenous risk factors of corporate bankruptcy during the COVID-19 pandemic in EU countries. This study aims at revealing how to evaluate the risk of corporate bankruptcy phenomenon in the COVID-19 times. The question arises as to whether Schumpeter’s creative destruction approach is still accurate. The article concentrates on implementing the fsQCA (fuzzy set Qualitative Comparative Analysis) method to identify and evaluate the main exogenous drivers of corporate bankruptcy in EU countries based on Fragile States Index data. This new approach focuses on fuzzy sets theory. The fsQCA method is a globally recognized alternative to quantitative analysis (in which the causal complexity is ignored) and qualitative methods for examining individual cases (which do not have the tools to generalize on their basis). The research indicates and examines the main external factors that would increase the risk of corporate bankruptcy in EU countries: namely, economic decline, uneven economic development, unemployment rate, demographic pressure, and government debt. The study discusses the influence of zombie companies on economies during the COVID-19 pandemic. Identifying risk factors that determine the threat of corporate bankruptcy may constitute practical recommendations for business and restructuring practitioners, financial institutions, and banking and public sector representatives in creating warning and recovery measures during the COVID-19 pandemic.
Highlights
Risk and uncertainty during the COVID-19 pandemic have increased globally and nationally and locally
In order to emphasize the impact of the spread of the coronavirus on the economy, De Alwis (2020) uses a new term, “coronomics”, which is a merger of the two terms “corona” and “economics” and it studies the negative consequences of the coronavirus for the economy
This study aims at revealing how to evaluate the risk of corporate bankruptcy phenomenon during the COVID-19 times
Summary
Risk and uncertainty during the COVID-19 pandemic have increased globally and nationally and locally. The coronavirus outbreak has influenced many areas of activity, including tourism, passenger transport (road and air), the automotive industry, the hotel and catering industry, and global supply chains, but it has intensified many negative phenomena, e.g., fluctuations in the prices of financial instruments, information asymmetry, financial instability, corporate bankruptcies, and unemployment. This generates huge public and private costs, and it is crucial from economic and social perspectives. This is significant to mitigate the impact of COVID-19 and build back better by resourcing resilience, restoring livelihoods, and supporting employees’
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
