Entrepreneurial resilience and firm performance during the COVID-19 crisis - Evidence from Hungary

Purpose: Recognising the swift and negative impact of COVID-19 on innovation, entrepreneurial behaviour, and small and medium enterprises' (SME) performance, the authors examine the situation and prospects of Hungarian companies and evaluate entrepreneurial resilience and firm performance, with a specific focus on subsidised firms. Design/methodology/approach: Data from two surveys are used. This is a combined dataset of the database of Hungarian companies required to use the double entry bookkeeping system, and the integrated monitoring database, established by the MIT to cover financial assistance from both the European Union and national budgets. The analyses use the propensity score matching method. The ultimate goal of the study is to show the micro-level effects of the COVID-19 crisis on entrepreneurs, with special focus on previously received financial assistance by a firm, its geographical location (based on NUTS1 level 2 regions and urban development zones2), industry (level 2 NACE3 codes), and size. Findings: The result provides evidence that subsidies have a positive impact on SMEs' resilience, employment, sales, and productivity. Originality/value: The originality of the research lies in its novel finding that the assisted companies have proven to be more resilient and far more optimistic regarding their prospects than those enterprises that did not receive financial support. © 2021. All Rights Reserved.