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The pandemic crisis in Italy: an assessment through a new classifier of firm economic-financial solidity

Author

Listed:
  • Carlo Boselli

    (Istat Italian National Institute of Statistics)

  • Stefano Costa

    (Istat Italian National Institute of Statistics)

  • Marco Rinaldi

    (Istat Italian National Institute of Statistics)

  • Claudio Vicarelli

    (Istat Italian National Institute of Statistics)

Abstract

Our goal is to present a new classifier of economic-financial solidity (EFSI) of Italian firms, which can be used to assess the evolution of Italian firms’ economic and financial structure. In particular, considering profitability, solidity and liquidity (all evaluated in terms of their sustainability over time) we classify firms in four classes: Healthy, Fragile, At-risk, Highly at-risk. We find that in 2011–2020 a strengthening of economic and financial structure took place in the Italian business system, a trend that continued also during the pandemic year. To investigate this latter aspect, we consider the entry of firms into the EFSI Highly at-risk class (“downgrades”) in 2019–20. Using a matching technique, we run two exercises, comparing the downgrade rates in 2019–20 (Covid-19 crisis) versus 2011–12 (sovereign debt crisis) and successively versus 2018–19 (the last pre-pandemic year of economic growth), considering the firms with the same structural and economic characteristics in the two pairs of periods. Our results argue that, with respect to pre-Covid year, Governmental aid has limited the negative consequences of the pandemic especially on the smaller firms (those more severely hit by the crisis); with respect the 2011–12 crisis, in several sectors the support measures more than fully compensate for the negative effects of the pandemic, notwithstanding its stronger economic impact on GDP than the previous crisis episode.

Suggested Citation

  • Carlo Boselli & Stefano Costa & Marco Rinaldi & Claudio Vicarelli, 2025. "The pandemic crisis in Italy: an assessment through a new classifier of firm economic-financial solidity," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 52(2), pages 451-471, June.
  • Handle: RePEc:spr:epolin:v:52:y:2025:i:2:d:10.1007_s40812-024-00328-x
    DOI: 10.1007/s40812-024-00328-x
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    References listed on IDEAS

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    1. Didier, Tatiana & Huneeus, Federico & Larrain, Mauricio & Schmukler, Sergio L., 2021. "Financing firms in hibernation during the COVID-19 pandemic," Journal of Financial Stability, Elsevier, vol. 53(C).
    2. Kahn, Charles M. & Wagner, Wolf, 2021. "Liquidity provision during a pandemic," Journal of Banking & Finance, Elsevier, vol. 133(C).
    3. Francesco Columba & Tommaso Orlando & Francesco Palazzo & Fabio Parlapiano, 2022. "The features of equity capital increases by Italian corporates," Questioni di Economia e Finanza (Occasional Papers) 709, Bank of Italy, Economic Research and International Relations Area.
    4. Adian,Ikmal & Doumbia,Djeneba & Gregory,Neil & Ragoussis,Alexandros & Reddy,Aarti & Timmis,Jonathan David, 2020. "Small and Medium Enterprises in the Pandemic : Impact, Responses and the Role of Development Finance," Policy Research Working Paper Series 9414, The World Bank.
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    6. Jean Tirole, 2006. "The Theory of Corporate Finance," Post-Print hal-00173191, HAL.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Covid-19; Economic-financial solidity; Firm aids; Mahalanobis-metric matching;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management
    • H81 - Public Economics - - Miscellaneous Issues - - - Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts
    • H84 - Public Economics - - Miscellaneous Issues - - - Disaster Aid
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • L80 - Industrial Organization - - Industry Studies: Services - - - General

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