THE IMPACT OF COVID-19 ON ITALIAN FIRMS’PROFITABILITY: A PANEL EVENT STUDY

Abstract

Using data from the AIDA dataset carried out by Bureau van Dijk, we empirically analyze the effect of Covid-19 pandemic on the financial performance of enterprises, specifically focusing on their operational efficiency and capacity to generate profits.  The panel structure of the dataset enables us to execute a Panel Event Study, thereby furnishing empirical insights into the significant repercussions of the Covid-19 outbreak on the profitability of Italian companies. The findings demonstrate a noteworthy and enduring influence of the pandemic on businesses, albeit with varying degrees of severity contingent upon the industrial sector and geographic location of the firms. The heterogeneous results are indicative of the diverse lockdown measures on economic activities and the substantial regional economic disparities prevalent within our country.