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Enterprise resilience to the COVID-19 pandemic: The role of business environment

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  • Lin Fu
  • Yupeng Shi
  • Xuze Yang
  • Wentao Zhang

Abstract

Enterprise resilience captures enterprises’ ability to survive and develop under uncertainties and shocks. Taking the shock of COVID-19 as an example, this paper employs a unique firm-level national survey dataset collected from a sample of nearly 40,000 Chinese private enterprises in 2020 to systematically explore the relation between local business environment and enterprise resilience. Our estimation results using ordered probit model indicate that favorable business environment can significantly enhance enterprise resilience and mitigate the shock of COVID-19 on firm performance. Mechanism analysis further shows that enterprises under better business environment generally have greater resilience as the result of timely and effective government support, reliable supply of production factors and logistics service, and lower levels of financial constraints. Our study deepens the understanding of the economic consequences of business environment and also sheds a new light on enterprise resilience enhancement.

Suggested Citation

  • Lin Fu & Yupeng Shi & Xuze Yang & Wentao Zhang, 2023. "Enterprise resilience to the COVID-19 pandemic: The role of business environment," PLOS ONE, Public Library of Science, vol. 18(8), pages 1-18, August.
    • Handle: RePEc:plo:pone00:0288722
    DOI: 10.1371/journal.pone.0288722
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    References listed on IDEAS

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    1. Parker, Hamieda & Ameen, Khadija, 2018. "The role of resilience capabilities in shaping how firms respond to disruptions," Journal of Business Research, Elsevier, vol. 88(C), pages 535-541.
    2. Natalia Ortiz-de-Mandojana & Pratima Bansal, 2016. "The long-term benefits of organizational resilience through sustainable business practices," Strategic Management Journal, Wiley Blackwell, vol. 37(8), pages 1615-1631, August.
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    Cited by:

    1. Ruonan Wang & Guangsheng Zhang, 2025. "Does optimising the business environment enhance enterprise resilience? The role of digital innovation and entrepreneurial spirit," Palgrave Communications, Palgrave Macmillan, vol. 12(1), pages 1-15, December.

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