Financial Resilience to the Economic Shock of COVID-19: An Empirical Study of Enterprises in Serbia

This paper examines the financial resilience of medium and large enterprises in Serbia during and after the COVID-19 pandemic. Using economic data from 3,020 firms over six years (2018-2023) obtained from financial statements submitted to the Serbian Business Registers Agency, and following standard data-cleaning procedures, the study employs fixed-effects regression with robust standard errors. The results reveal that firm size and state ownership mediate resilience in ways that challenge established models. Large enterprises increased their operating revenues by 19.4% during the pandemic and by 33.7% in the post-COVID period, compared to medium-sized firms. Profit margins diverged sharply: large private firms improved operating margins, while state-owned firms experienced significant declines despite having larger asset bases. Foreign ownership did not confer significant advantages. These findings indicate that resilience models developed for advanced economies may not fully translate to transitional contexts such as Serbia. The results underscore the need for tailored policy measures to support medium-sized enterprises and for a reassessment of how short-term stabilisation efforts influence long-term efficiency and market structure.