Specific impact of the Covid-19 pandemic on the profitability of logistics companies based in the Western Balkan countries

Abstract

The aim of this paper is to theoretically and empirically present the effect of the Covid-19 pandemic on profitability. In difficult economic times caused by coronavirus, companies that supplied logistical services assisted other businesses in successfully conducting their daily business operations. On the other side, the pandemic has been a contributing factor in the massive interruption in transportation flows all over the world. The research was conducted on a sample of 798 active companies that operated within the logistics industry of the Western Balkans in the period from 2015 to 2020. An empirical research was performed using panel regression analysis. Evaluation of the fixed-effect models confirmed the existence of a positive and statistically significant impact of the Covid-19 pandemic on the profitability expressed through return on total assets (ROA) and return on equity (ROE). The results confirmed the specificity of the logistics industry, indicating that it is one of the few industries that have managed to achieve higher profitability during the crisis and recession brought by the pandemic in early 2020. Given that the logistics sector has played a vital role in supplying household supplies, medicines and medical equipment, the results could help logistics companies to further improve operational performance and risk management in pandemic situations, as well as to improve the resilience of their activities to future similar crises.