The role of foreign-owned entities in building economic resili-ence in times of crisis: The case of European digital and technologically-intensive firms during the Covid-19 pandemic

Abstract

Research background: Over the decades, foreign-owned entities (FOEs) have become an important part of the economic landscape considered as behemoths of globalisation, but also transmitters of positive effects such as technology or know-how spillovers. In times of volatility and uncertainty, firms’ contribution to building a resilient economy is at the top of the public agenda. Purpose of the article: The purpose of the article is two-fold. Firstly, we test, how FOEs perform in this stressful time of volatility and uncertainty. Secondly, we examine the contribution to resilience by digital and technologically intensive sectors. Methods: The study utilises the Bureau van Dijk (BvD) Orbis firm-level database as a primary data source. The results are derived with the use of two econometric approaches. Firstly, we estimate a static model utilising the ordinary squares estimator. Secondly, we re-estimate the equations using a two-step System GMM estimator. It introduces a lagged dependent variable into the model and implements a correction for endogeneity among covariates by including instruments (in levels and differences). Findings & value added: We use size, age, ownership, gearing, and intangibility as firms’ financial performance determinants, together with the sector-, country- and time-fixed effects. FOEs compared to domestic ones generated a higher revenue growth rate. In times of crisis high-tech and digital firms are more resilient. However, ownership does not matter in this respect. We contribute to the discussion about functions performed by FOEs in crisis and turbulent times, in which resilience issues are on top of the agenda. Our research intends to bridge the gap between the performance of FOEs, micro-level analysis, and resilience.

Sustainable Employment Creation through the Polish Investment Zone in Lagging Regions

“…Secondly, the difficulty in obtaining data on firms' employment is a serious concern for researchers analysing different aspects of corporate performance in Poland, which limits the number of firm-level observations. Thirdly, the timespan of the conducted research was very stressful for entrepreneurs, while the world became more volatile, uncertain, complex, and ambiguous-a VUCA environment [60]. The effects of numerous shocks (e.g., the COVID-19 pandemic, Russian invasion of Ukraine, energy prices surging) could impact decisions postponing or aborting investment projects [61], including employment creation in firms, their internationalisation [62], etc.…”

Exporting Activity in Rural Regions: Does It Differ From Urban Regions? Evidence From Poland

“…Our results fit into the broad discussion on overcoming economic remoteness in rural regions, improving competitiveness, and increasing exports. The issue becomes particularly important nowadays, when regions are in even more severe competition due to increased openness and volatility on the markets (Umiński et al, 2023).…”