The impact of significant macroeconomic turbulence on corporate debt levels: A case study of Visegrad Group countries during COVID-19 pandemic
The impact of significant macroeconomic turbulence on corporate debt levels: A case study of Visegrad Group countries during COVID-19 pandemic

Summary/Abstract: Research background: Macroeconomic volatility leads to increased corporate indebtedness,ultimately undermining the broader economic environment and firms’ competitiveness acrossall industries. The COVID-19 pandemic, among all recent disruptions, was a profound sys-temic shock with enduring effects on the economy, offering a valuable case study for analys-ing its wide-ranging impact on corporate financial stability. The pandemic’s spread signifi-cantly influenced corporate debt levels, and while this was a common issue for the corporatesector, its impact on financial performance varied considerably across industries.Purpose of the article: The consequences of the pandemic are evident from various perspec-tives, and it is essential to monitor and evaluate the changes caused by the COVID-19 pan-demic, not only for immediate understanding but also for their long-term and universal impli-cations on economic and social systems worldwide. The main intention of this study is todescribe and quantify the impact of the COVID-19 pandemic, examine changes in the growthof critical determinants and identify new trends in enterprises operating in Visegrad Groupcountries, providing insights that may be valuable for broader contexts and future crises.Methods: Friedman test results indicate a principal distinction between groups but do notidentify which pairs of groups differ. However, as the monitored indebtedness indicatorsexhibit significant differences, we employ the Bonferroni correction to determine which moni-tored periods had the largest disparities in the individual indicators. This study employspanel data from 12816 firms from Visegrad Group countries covering 2018–2022.Findings & value added: This study provides a detailed and subtle explanation of corporatedebt dynamics during the pandemic years, revealing considerable differences beyond directeffects. Based on the most recently available financial data, we present valuable long-terminsights concerning enterprises’ resilience and flexibility and enrich the theoretical knowledgeconcerning financial stability under crisis. Moreover, the findings offer actionable advice forbusiness leaders and policymakers seeking to enhance corporate debt management and eco-nomic competitiveness in a globalising and turbulent world. These findings are of worldwideapplicability and will undoubtedly remain so for practice and scholarship in the forthcomingfew years.

• Details
• Contents