Outcomes of firm resilience in wild card crises-Country, industry, and firm effects in the Covid-19 crisis

In this paper, we examine to what extent external factors (country and industry) and internal factors (capabilities of firms) explain firm resilience outcomes during the first and toughest months of a wild card crisis. Our study uses multivariable regressions on a sample of 1,180 firms. Using evidence from a survey of 58 countries and 17 industries, our results show that, contrary to the mainstream, external effects play a more significant role in explaining resilience outcomes than internal effects. They also highlight the important role of firms' adaptive capabilities in the initial phase of crises. The study contributes to the existing literature by shedding light on the importance of resilience and on the relative influence of internal and external factors in predicting resilience outcomes in the face of a global shock. The paper highlights the need for further research into performance variance in the very short run when firms face a wild card situation. It also discusses implications for governments and firms in improving their resilience capabilities and emphasizes the importance of ensuring that aid reaches small firms and that managers prepare firms with excess liquidity for times of crisis.