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Unveiling the pandemic's impact: Did COVID-19 drive business failures? A Cutting-Edge Analysis with Spatial Autoregressive Modelling

Author

Listed:
  • David Garnés-Galindo

    (Universidad Politécnica de Cartagena)

  • Manuel Ruiz-Marín

    (Universidad Politécnica de Cartagena)

  • María Luz Maté-Sánchez-Val

    (Universidad Politécnica de Cartagena)

Abstract

The objective of this study is to estimate the impact of Covid-19 on business behavior and its spatial effect among companies. Four specifications have been developed to analyze the pandemic's influence on key variables determining business behavior: liquidity, indebtedness, profitability, and efficiency. This study has focused on the province of Barcelona, Spain, from which a database of failed and non-failed companies has been compiled, both before and after the pandemic. The models have been estimated using the spatial Seemingly Unrelated Regressions (SUR) methodology, and each equation was estimated following a spatial Differences-in-Differences model. The results confirm that the emergence of Covid-19 has had a significant impact on companies' financial ratios, worsening their positions in terms of liquidity, indebtedness, and efficiency, with the existence of a spatial contagion pattern.

Suggested Citation

  • David Garnés-Galindo & Manuel Ruiz-Marín & María Luz Maté-Sánchez-Val, 2026. "Unveiling the pandemic's impact: Did COVID-19 drive business failures? A Cutting-Edge Analysis with Spatial Autoregressive Modelling," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, vol. 65(65), pages 129-142, June.
    • Handle: RePEc:ris:invreg:022924
    DOI: 10.38191/iirr-jorr.24.047
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    JEL classification:

    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General

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