The effect of COVID-19 epidemic to the sustainable operation of the Hungarian social cooperatives based on financial reports from 2019, 2020 and 2021

Abstract

This paper measures the effect of Covid-19 crisis to the sustainable operation of the Hungarian social cooperatives based on financial reports between 2019 and 2021. Consequently, 740 financial reports were analysed, which covers the population of the whole social cooperative sector in Hungary. The purpose of research was to detect the effect of Covid crisis to the management of Hungarian social cooperatives sector that faced two challenges in this period – the draining out of state subsidies and the dramatic changes caused by the epidemic. The changes of net sales, value-added, operating profit, net profit, and the changes of investment were examined between 2019 and 2021. Rank correlation was used to detect the significance of sectors to the variables, where the sectors were identified by one digit depth (according to Nomenclature of Economic Activities, NACE). The overall ranking was determined by calculating the aggregate average ranking by each examined variable. Findings were the followings: The operational sustainability of social cooperatives is determined by the aptitude of the management, the local microeconomic environment, and the availability of financing sources, rather than the changes in macroeconomic climate. In the world of social cooperatives, the outperforming sectors were the accommodation and recreation ones, while the construction industry and information services performed poorly.