South Africa’s Businesses’ Resilience to COVID-19: Lessons from Latent Class Analysis of World Bank Enterprise Survey

Abstract

The impact of COVID-19 on businesses has manifested in different degrees across the globe. Yet, literature has not classified firms regarding their resilience to the pandemic. This paper applied the latent class analysis approach to the 2020 World Bank Enterprise Survey of the Gauteng province in South Africa to categorise the businesses’ resilience to COVID-19 impacts regarding their operations and short-term finances. The study found evidence to suggest that 79% and 13% of businesses suffered operational and short-term financial constraints, respectively. The study concluded that many South Africa’s businesses did not show high resilience to the pandemic, corroborated by the latest bankruptcy filing surge. The study has implications for targeted intervention application. The study recommended ongoing collection of similar data to gauge businesses’ health at regular intervals.