Did COVID-19 modify the spatial concentration of business failure?

Abstract

The existing literature has examined the impact of the coronavirus disease (Covid-19) pandemic on business failure, highlighting firms’ internal characteristics. However, information on changes in firms’ external environments remains scarce. This study examines whether Covid-19 has also influenced the spatial co-locational patterns of business failure processes. Therefore, the authors apply symbolisation techniques to identify different business failure processes during pre- and post-covid periods. In addition, the authors compute the Q(m) spatial dependence test for categorical variables to identify differences in the colocation patterns before and after covid. The study finds significant differences in the spatial association of business failure processes, which are further understood when the authors examine sectoral differences.