Journal of the National Research University Higher School of Economics

Every crisis affects entrepreneurial activity; for some entrepreneurs, it is an opportunity for a new start; others are forced to shut down their businesses. This study aimed to analyze the effect of the global coronavirus (so-called COVID-19) pandemic on Czech entrepreneurial activity. The article exploits the administrative data covering business demographics of seventy-seven Local Administrative Units (LAU1) regions over the years 2008-2020. Data were obtained from the Czech Statistical Office. The study provides insights into the short term effects of the pandemic, i.e. one year after. The results from the panel regression models and placebo tests comparing forecasted values of new businesses registrations and closures with actual values obtained after the end of 2020 do not show that there would be a significant drop in the Czech entrepreneurial activity. On the opposite, the data indicate that the Czech entrepreneurial activity grew and even increased compared with 2019. However, the obtained results need to be interpreted with caution, as many factors influenced Czech businesses’ development. Specifically, we mention the past economic growth, the introduction of public entrepreneurship and SME policy instruments and financial back-ups of the business owners. There are several implications of the conducted research. For instance, there is a need to observe the long-term effects of the pandemic on business demography and its structure. We propose to study changes in bankruptcy rates in the most harmed sectors such as tourism, hospitality, culture or sport and compare them with sectors that could easier transfer their business activities online.