Unprecedented shocks and the resilience of economic systems: the importance of heterogeneity

Recent unprecedented shocks such as the global pandemic due to Covid-19 have significantly challenged the resilience of economic systems and individual firms.The reaction of markets, industries and businesses, as well as the ability of public sector and governments to act promptly in a fast-changing economic environment could lead to significant heterogeneity in the exposure and the real and financial effects of a (negative) economic shock.This Special Section of the Journal of Industrial and Business Economics highlights some of the effects of such a shock using mostly the context of the global Covid-19 pandemic.The insights, however, likely have applicability and relevance beyond the specific context.The five articles part of the Section take on both macro and micro perspectives by examining various aspects of the economic and financing activity of firms across a number of countries, within a specific sector of a single country, and within a single organization.In this process, they also highlight the interplay between reactions of firms to the shock and government policy and initiatives aimed at addressing the challenges presented by it.A common thread that underlines these contributions is the limited informativeness of averages and the importance of heterogeneity.In the first article of the Section, Annalisa Ferrando and Judit Rariga examine how economic and financing conditions of Euro Area firms change around the Covid-19 pandemic.The analysis, based on a large survey conducted by the European Central Bank and the European Commission, suggests that financial stability and economic performance of the firms decreased sharply, while their financing needs and obstacles