Pandemic crisis and firm survival: evidence from the Italian manufacturing industry

The paper studies the characteristics that affected firms’ ability to react to the economic crisis induced by the COVID-19 pandemic. We use firm-level data on Italian manufacturing companies to examine the role played by external relations and the characteristics of the local environment. In line with recent works, the study finds that micro-firms, highly indebted and less productive firms have a higher probability of exiting the market. Results also support the view that digital presence and financial soundness have favoured the survival of enterprises. Beyond firm-specific factors, we highlight that a firm’s resilience capability is related to its external linkages, namely the participation in a group or to a network contact. As for local ecosystem factors, while firms in industrial districts have a higher default probability, our results suggest that an innovative local environment can slightly mitigate the probability of permanently closing during the crisis.