ABSTRACT
Since the 1990s, the Czech economy has faced four crises. Each of them had different causes, duration and consequences for the non-financial corporate sector. The first crisis (1997-1998) had internal causes and severely affected non-financial firms. In contrast, the second crisis (2009) had external economic causes and non-financial corporations emerged with a positive economic outcome. As a result of extremely rigorous economic policies and net borrowing by non-financial firms, the Czech economy experienced a crisis in 2012 and 2013. The COVID-19 pandemic was the external, not economic cause of the fourth crisis (2020-2021) that brought about a successful outcome for non-financial corporations. The aim of this analysis is to answer the question of what causes these divergent economic results and why the external impulses of the crisis led to a reversal of the traditionally negative economic balance. The results showed that the levels of indebtedness and profitability conceal the main differences in conditions. The analysis is based on data from the Czech National Accounts and uses relative indicators to describe the economic behaviour of non-financial corporations constructed in such a way that their explanatory power is closer to the conditions for assessing economic performance in corporate practice. © 2022 by the authors;licensee Online Academic Press, USA.
ABSTRACT
– We develop a microsimulation model fed by a particularly rich set of individual data in order to assess the impact of the health crisis on the financial situation of more than 645,000 French companies in 2020. We show that the relative stability in net debt at the macroeconomic level is concealing major disparities on an individual level. Heterogeneity is particularly significant between sectors (before and after public support measures) but is also present within each sector. Our simulations confirm the need for public intervention during the crisis: a mere adjustment in company behaviour is insufficient to absorb the shock. These support measures brought the share of firms with a negative cash flow shock in line with normal years, although “extrem” cash flow shocks occur more frequently than usual. One important lesson learned from this exercise is that sector and size cannot be the only criteria taken into account when drawing up crisis recovery policies. © 2022, Institut National de la Statistique et des Etudes Economiques. All rights reserved.