The impact of significant macroeconomic turbulence on corporate debt levels: A case study of Visegrad Group countries during COVID-19 pandemic

Research background: Macroeconomic volatility leads to increased corporate indebtedness, ultimately undermining the broader economic environment and firms’ competitiveness across all industries. The COVID-19 pandemic, among all recent disruptions, was a profound systemic shock with enduring effects on the economy, offering a valuable case study for analysing its wide-ranging impact on corporate financial stability. The pandemic’s spread significantly influenced corporate debt levels, and while this was a common issue for the corporate sector, its impact on financial performance varied considerably across industries. Purpose of the article: The consequences of the pandemic are evident from various perspectives, and it is essential to monitor and evaluate the changes caused by the COVID-19 pandemic, not only for immediate understanding but also for their long-term and universal implications on economic and social systems worldwide. The main intention of this study is to describe and quantify the impact of the COVID-19 pandemic, examine changes in the growth of critical determinants and identify new trends in enterprises operating in Visegrad Group countries, providing insights that may be valuable for broader contexts and future crises. Methods: Friedman test results indicate a principal distinction between groups but do not identify which pairs of groups differ. However, as the monitored indebtedness indicators exhibit significant differences, we employ the Bonferroni correction to determine which monitored periods had the largest disparities in the individual indicators. This study employs panel data from 12816 firms from Visegrad Group countries covering 2018–2022. Findings & value added: This study provides a detailed and subtle explanation of corporate debt dynamics during the pandemic years, revealing considerable differences beyond direct effects. Based on the most recently available financial data, we present valuable long-term insights concerning enterprises’ resilience and flexibility and enrich the theoretical knowledge concerning financial stability under crisis. Moreover, the findings offer actionable advice for business leaders and policymakers seeking to enhance corporate debt management and economic competitiveness in a globalising and turbulent world. These findings are of worldwide applicability and will undoubtedly remain so for practice and scholarship in the forthcoming few years.