Business resilience: Lessons from government responses to the global COVID-19 crisis

This study explores the survival of firms across countries, and what factors contribute to their ability to withstand large-scale exogenous shocks, focusing on the COVID-19 pandemic. Using corporate default risk as a measure of non-resilience, our empirical results from 97 countries reveal that stringent COVID-19 containment measures created a significant resilience test for businesses worldwide. Further tests suggest that cash holdings, knowledge assets, international sales, and access to foreign capital markets are crucial for global businesses to pull through exogenous shocks. Country-level institutional qualities also play an essential role in shaping business resilience during a crisis. Our study is the first to comprehensively analyze the drivers of business resilience across diverse countries using the COVID-19 outbreak as a major global crisis, providing a nuanced understanding of this topic in international business. •This study explores the resilience of firms across countries and what factors constitute their ability to withstand large-scale economic shocks.•Our results reveal that the COVID-19 crisis and its containment measures represent a unique testing platform for business resilience worldwide.•Cash holdings, knowledge assets, cross-border sales, and access to foreign capital markets are crucial for global business resilience.•Country-level institutional qualities are also shown to influence business resilience significantly.•This study is the first to analyze the drivers of business resilience across countries using a truly global crisis of the COVID-19 outbreak.