Khóa luận tốt nghiệp: Factors affecting business recovery of Vietnamese listed firms from the Covid-19 pandemic

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VIETNAM NATIONAL UNIVERSITY HANOI

UNIVERSITY OF ECONOMICS AND BUSINESS

FACULTY OF FINANCE & BANKING

Qe Gov

GRADUATION THESIS 2023

Lecturer: PhD Vu Thi Loan

Student: Bui Duc Viet

Class: QH 2019E TCNH CLC 3

ID Card: 19050780

I hereby declare that this graduation thesis is my own work, with the support of

my supervisor, and has not copied the work of others This is my own research work The

data and secondary information used in the thesis are sourced and clearly cited

This statement is entirely my responsibility

A completed study would not be done without any assistance Therefore, the

author who conducted this research gratefully gives acknowledgement to their support

and motivation during the time of doing this research as a requirement of completing mythesis

The author would like to thank the Board of the University of Economics andBusiness-Vietnam National University for creating favorable conditions for the author tocomplete this thesis

The author would like to thank the lectures of the Faculty of Finance and Banking,

University of Economics and Business-Vietnam National University for their help the

author in the thesis implementation process

In particular, I would like to express my endless thanks and gratefulness to mysupervisor PhD Vu Thi Loan who always gives me continuously advices throughout theprocess of completion of my thesis Her encouragement and comments had significantlyenriched and improved my work Without her motivation and instructions, the thesiswould have been impossible to be done effectively

Thank you sincerely!

TABLE OF CONTENTS))20P0.) 0.0000 2{0.919 4B829092u)061100101077 3TABLE OF s90 4

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Chapter 4: Research Results And Assessment Of Factors Affecting Business

Recovery Of Vietnamese Listed Firms From The COVID 19 Pandemiic 35

4.1 Business situation of enterprises before and during the pandemiic 35

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4.3 Results of analysis of factors affecting post-epidemic damage and recovery44

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LIST OF ABBREVIATION

Abbreviation Full name

ASEAN Association of Southeast Asian Nations

COVID-19 Coronavirus Disease 19

EFA Exploratory Factor Analysis

FDI Foreign Direct Investment

GDP Gross Domestic ProductHOSE Ho Chi Minh City Stock ExchangeHNX Hanoi Stock Exchange

OLS Ordinary Least SquareSPSS Statistical Package for the Social SciencesSME Small And Medium Enterprise

VIF Variance Inflation Factor

LIST OF FIGURES

Figure 3.1: Diagram of the research DFOCSS -.cctstsskikkEiiirrrsisiserrrsrsre 26

Figure 4.1: Diagram of Revenue and Profitability of Aviation Enterprises before TheCOVID-19 pandeMic ccsesscscssessessssseseesecseessesseseeeaeeseseseseseesenneeneseseceaeeseneeeeeseesaeeseneseseneneaeaneneneneaes 35Figure 4.2: The damage caused by the COVID-19 epidemic of The Aviation Industry

CU ee 44

Statistical results describe the variables in the model 44

Model SummarV 5-5 ssssseseskeEsEsrsrsrsrrsrrrirrisrsrsrsrsrsrsrrirrrrersrsrsrsrie 45COẨẨÏCÏ@TIES HH HHYHHHHHHHHHHHHERERESESEEEESEEsk 47Summary Of Tests Of Hypotheses -.-«csestsekkkieirrksisisrrrrrsre 47

Chapter 1: Introduction

1.1 The urgency of the subject

The COVID-19 pandemic has unleashed profound and far-reaching consequencesupon the global economy and financial markets Its disruptive force has triggered severedeclines in incomes, a surge in unemployment rates, and widespread disruptions across

diverse sectors, including transportation services, manufacturing, and intricate supply

chains spanning the globe The impact of COVID-19 has been particularly notable due tothe significant disturbances and restrictions imposed on the flow of goods and services,

subsequently inflicting a detrimental blow to business performance Consequently, the

efficiency and viability of businesses have experienced a marked reduction

The COVID-19 pandemic has had a significant impact on businesses worldwide

It caused disruptions in global supply chains, leading to shortages of materials anddelayed deliveries Many businesses, especially in sectors like hospitality, travel, andretail, had to shut down temporarily or permanently due to reduced revenue andmounting debts Financial challenges arose from decreased revenue, increasedexpenses, and limited access to financing The effects varied across industries andregions, with some sectors experiencing more severe consequences Businessadaptability, recovery, and agility have been vital for navigating the challenges andseizing opportunities during these unprecedented times

Until 2022, Vietnam has controlled the pandemic and has returned to the new

normal and gradually recovered In Vietnam, the recovery of companies post-COVID-19has been mixed Some sectors are experiencing a faster recovery, while others faceongoing challenges The manufacturing sector, especially electronics, textiles, andfootwear, is showing signs of recovery due to strong global demand and improved tradeactivities Domestic-focused industries like retail, food and beverage, and e-commerceare gradually recovering as restrictions ease and consumer confidence improves.However, the tourism and hospitality industry has been severely impacted, withsignificant revenue losses due to travel restrictions and reduced tourism The recovery

of this sector depends on the reopening of borders and the return of international

tourists Small and medium-sized enterprises (SMEs) have faced various challenges,

including limited access to capital and disrupted supply chains The government hasimplemented support programs to aid their recovery Factors influencing the recovery

rates, and businesses' adaptability Recovery trajectories vary among industries and

individual companies On what factors does that recovery depend to help the companyassess its financial sustainability and possibly help it cope with future difficulties? The

objective of this study was to find and examine the factors that influence the recovery of

businesses after COVID-19

1.2 Objectives of the study

Objective: The main goal of this study is to comprehensively assess the impact ofvarious factors on the recovery of enterprises in the aftermath of the COVID-19 pandemic

1.3 Object and Scope of the study

Research Object: The primary object of this study is to identify the factors thatsignificantly impact the recovery of businesses in the aftermath of the COVID-19

pandemic.

Research Scope: The study will specifically focus on these three industries, namelyaviation, tourism, and import and export during the recovery period from 2022 to gainacomprehensive understanding of the unique challenges they faced and the recoverystrategies they adopted during and after the pandemic

1.4 Research question

@ What factors could theoretically affect recovery from crises/ pandemics including

COVID-19?

@ How do these factors affect recovery in Vietnam?

@ What recommendations can be drawn from the research results?

1.5 Research methods

The qualitative research carried out is an overview of related previous studies,

from the research overview, the author has drawn a research history in groups of topics, then chronological order and above many different markets Qualitative studiesare also carried out through descriptive analysis, comparison, and evaluation ofcompanies and industries listed on the stock market in terms of the impact and recoveryafter the COVID-19 epidemic

sub-“Quantitative research is research that uses different methods (mainly statistics)

to quantify, measure, reflect, and interpret relationships between factors (variables).”

Nguyen Dinh Tho, 2011)

Use regression model and evaluate the factors affecting recovery The study was

statements of 50 enterprises in 3 industries of aviation, export and tourism on the

Vietnamese stock market

1.6 Expected contribution of the topic

This research aims to contribute to the current body of knowledge by being one of

the pioneering studies to assess and analyze the factors and recovery of businesses in thepost-COVID era By utilizing empirical data and employing appropriate researchmethodologies, the study will shed light on the specific factors that impact businessrecovery in the face of the pandemic's aftermath

Drawing upon the research findings, this study will provide valuablerecommendations for businesses, investors and managers operating in the post-COVIDperiod These recommendations will be derived from the empirical evidence and insights

obtained through the comprehensive analysis of influencing factors and business recovery The aim is to offer practical guidance and strategies that can help businesses,

investors and managers enhance their recovery, adapt to the new normal, and navigatethe challenges and uncertainties of the post-COVID environment

Chapter 2: Research Overview And Theoretical Basis Of Factors

Affecting Recovery From COVID-19 Pandemic

2.1 Research overview

2.1.1 Overview of foreign research

Ever since the identification of COVID-19 as a global pandemic, the academiccommunity has been actively engaged in conducting research to comprehend the far-reaching implications of this global phenomenon A comprehensive review of the existingliterature confirms that recent studies have primarily focused on examining the impact ofCOVID-19 on businesses, particularly in the context of the impending economic downturnduring the pandemic and the strategic management policies adopted to navigate the post-crisis period

The effects of COVID-19 on businesses have varied due to factors such as the

nature of their operations, geographical location, prevailing economic conditions, and theability of enterprises to adapt and innovate in times of crisis Advanced economies, such

as the United Kingdom, have also witnessed adverse effects on corporate credit asrevealed by Brown, et al (2020) Moreover, studies by Bartik, et al (2020) andJuergensen, et al (2020) have reported significant financial vulnerabilities in the United

States

Several sectors, including retail, hospitality, food service, and entertainment, have

been disproportionately impacted by COVID-19 Stringent lockdown measures

implemented in countries like China and other parts of Asia, where many manufacturingplants are located, have resulted in severe disruptions to the supply of finished products.Consequently, businesses reliant on suppliers from these regions have experiencedvulnerabilities in their supply chains Thukral, et al (2021) notes that as manufacturingresumes and products begin to ship from China, small and medium-sized enterprise(SME) supply chains are affected by additional factors, such as increased freight rates due

to higher costs for flights and containers

The tourism and hospitality industry, as well as the sports industry, have also facedsignificant challenges due to COVID-19 The pandemic has led to the cancellation orpostponement of travel, competitive sports, and major events like the Olympic Games andFootball Championships to prevent mass gatherings Consequently, the tourism andhospitality sectors, which often comprise small tour operators, car rental companies,

substantial negative impact Previous research has shown that businesses, regardless of

their size, possess the ability to establish conditions for a rapid recovery from a crisis.Currently, businesses are responding to the economic impact of COVID-19 through

various strategies, including strengthening business recovery by diversifying suppliers,

enhancing their digital assets to facilitate online sales, improving employee benefits, andadapting their business models through pivoting or downsizing

According to Renzao Lin, et al (2022) examined how firms were selected to receivesubsidies based on a number of factors, such as their size and location Businesses thatbenefit more with a greater ratio of labor costs and prior knowledge in dealing with thesituation receive more help Furthermore, businesses with negative ecological effects are

less likely to receive financial support For the most part, the data shows that the law

establishes direct support for businesses in need, reducing their insolvency or insolvency,and eliminating substantial economic employment in the early stages of a recession

epidemic (March to June 2020).

Recovery is a crucial aspect of business crisis management as it helps

organizations understand how to adapt and withstand change Consequently, researchersand policymakers are closely examining ways to build business recovery The concept of

recovery was initially introduced in the ecological literature by Holling, et al (2001) and

Salvia, et al (2015) and it has subsequently evolved within the business context, drawingfrom complex systems' heuristic models recovery, as defined by Walker, et al (2002)

refers to an entity's ability to respond to change, reorganize, and maintain functionality, structure, identity, and responsiveness However, a single-principle-based definition of recovery may oversimplify its complex nature and fail to acknowledge the contextual

variations in which it can be applied Pettit, et al(2013) proposed two components of therecovery concept: vulnerability and capability Vulnerability refers to the fundamentalfactors that make a business susceptible to disruptions, while capability represents thecompany's capacity to anticipate and respond to disturbances

The relationship between financial factors and business recovery in the COVID period is of significant interest Altman, Hotchkiss, & Wang (2019) suggest thatbusiness failure is associated with both financial distress, where cash flow generation isinsufficient to meet obligations to creditors, and economic distress, where the businessmodel fails to deliver sustainable value propositions over time Therefore, corporate

post-distress involves a combination of financial and economic factors.

Theoretical and experimental studies have shed light on the interconnections

between the degree of financial distress and enterprise dynamics Kahl (2002) developed

a theoretical model indicating that in cases of financial distress, uncertainties regarding afirm's economic viability create incentives for creditors to delay liquidation decisions,enabling them to gradually learn about the recovery process or avoid inefficient activities.Bartram, Gregory, and Waller (2015) have suggested that explanatory economic risk

factors exhibit a closer relationship with equity volatility compared to risk metrics related

to financial factors Additionally, Jiang, Kim, and Zhang (2014) argue that companiesfacing financial difficulties tend to have higher recovery rates than those facing economicchallenges

2.1.2 Overview of domestic research

Numerous research projects examining the impact of COVID-19 on variousdomestic industries have garnered significant attention from the scientific community

Notably, research conducted by Dinh Thi Tuyet, Nguyen Thi Thu Thuy, and their colleagues (2021) has highlighted the profound effects of the pandemic on the tourism

industry As an integral sector for economic, political, and social development, tourismhas suffered greatly from the COVID-19 crisis The authors emphasize the need for

government intervention to support tourism businesses and expedite their recovery.

Proposed measures include temporarily reducing administrative inspections, ensuringsmooth business operations, lowering land rents, and facilitating vaccination for all

tourism workers Additionally, businesses should prepare to capitalize on the

post-pandemic period by offering suitable tourism products and services

The Faculty of Planning and Development, Faculty of Mathematical Economics,Faculty of Statistics, and Faculty of Economics at the National Economics University(2020) have focused on forecasting the economic impact of the COVID-19 pandemic inVietnam Their study aims to provide policy recommendations to mitigate negativeconsequences The findings suggest that second-quarter GDP growth is forecasted to beapproximately 2.0%, and even a recession may occur in a worst-case scenario Prolongedpandemic effects are expected to severely impact the overall economy and businesssector The authors recommend the government develop a range of economic policyscenarios, ranging from short-term support measures to long-term rescue initiatives, toeffectively address the epidemic's impact within Vietnam and globally It is crucial to

account for potential delays in the policy formulation and implementation process to

ensure timeliness and effectiveness

In her research on the cashew nut export market in Vietnam, Do Thuy Trang(2021) proposes the need for a loan support program to facilitate businesses’ access tonew cashew nut production and processing lines Accelerating the technologicalization ofthe export goods production chain is also emphasized Trang suggests establishing agroup lending program, tailored to specific small areas, which combines entrusted exportmethods with the application of Fourth Industrial Revolution technological achievements.Domestic enterprises could enter trust contracts with foreign enterprises, enablingintermediaries to handle export procedures, explore markets, and complete the necessary

procedures for Vietnamese cashew products to be showcased on e-commerce platforms.

This approach allows businesses to leverage opportunities during the pandemic and inthe new normal

Research conducted by Vietnam Airlines (2021) showcases the airline's proactive response to the COVID-19 outbreak since early 2020 Vietnam Airlines has implemented

various solutions to address the pandemic and foster recovery Key among them is acorporate restructuring plan, which encompasses finance, human resources, capital and

assets, and improvements in aviation safety and service quality The airline closely

monitors the epidemic and market developments, adapting its operations flexibly in linewith market conditions

These research studies shed light on the far-reaching implications of COVID-19 on domestic industries in Vietnam The findings underscore the importance of government support, policy formulation, technological advancements, and proactive strategies to

overcome the challenges posed by the pandemic and ensure a resilient recovery forbusinesses in the post-COVID era

2.1.3 Research gaps

On the basis of a review of domestic and international research articles, it can beseen that the topic of understanding the influencing factors of COVID-19 has attractedconsiderable attention from researchers

However, current research into the factors influencing recovery still hasunexplored aspects and complexities Studies have not yet clarified the concept of

recovery

Therefore, this study aims to conduct a focused investigation, assessment and

analysis, providing an objective understanding of the specific factors affecting the pandemic business recovery

post-2.2 Theoretical basis of factors affecting the recovery of enterprises after the pandemic

2.2.1 Theoretical basis of influencing factors of the COVID 19 pandemic

2.2.1.1 Group inside the enterprise

Company Size

The size of a business can have an impact on its post-COVID-19 recovery.Generally, larger businesses tend to have more resources and financial capabilities toweather the challenges brought about by the pandemic They may have greater access

to capital, stronger relationships with suppliers, and more extensive customer bases,

which can contribute to a faster recovery Larger businesses often have more diversifiedoperations, allowing them to adapt their strategies and pivot into new markets orproduct lines They may also have stronger digital infrastructure and online presence,enabling them to capitalize on the increased demand for online services and e-

commerce On the other hand, smaller businesses, particularly micro and small

enterprises, may face greater challenges during the recovery process They often havelimited financial resources, lower bargaining power with suppliers, and may heavily rely

on local or regional markets These factors can make it more difficult for them to

overcome the disruptions caused by the pandemic and resume normal operations.However, it's important to note that the impact of business size on recovery can vary

depending on the industry and the specific circumstances of each company Factors such

as the ability to adapt, access to government support programs, and the recovery of the

market in which the business operates also play significant roles in determining thepost-COVID-19 recovery trajectory

Return on sales (ROS)

Return on sales, also known as profit margin, can play a crucial role in the COVID-19 recovery of businesses It represents the profitability of a company by

post-measuring the percentage of sales revenue that translates into net profit A healthy return on sales is beneficial for businesses during the recovery phase as it indicates their

ability to generate profits and cover their expenses A higher return on sales allowsbusinesses to have more financial resources to invest in growth initiatives, such as

expanding operations, launching new products or services, or implementing marketing

campaigns to attract customers In the context of the COVID-19 pandemic, a strongreturn on sales can provide businesses with the necessary financial stability to navigate

through the challenges and uncertainties It can help them overcome revenue losses

incurred during the crisis and fund necessary adjustments in their operations.Furthermore, a higher return on sales can also enhance the confidence of investors,lenders, and stakeholders in the company's ability to recover and thrive in the post-COVID-19 landscape This can lead to increased access to financing and partnerships,which can support the company's recovery efforts

Return on assets (ROA)

Return on assets (ROA) is a financial metric that measures the profitability of a

company in relation to its total assets It indicates how efficiently a company is utilizingits assets to generate profits In the context of post-COVID-19 recovery, return on assetscan have a significant impact on a business's ability to recover and regain financial

stability A higher return on assets suggests that a company is effectively utilizing its

assets to generate profits This efficiency becomes crucial during the recovery phasewhen businesses need to maximize their revenue and minimize costs Efficient asset

utilization enables companies to optimize their operations, streamline processes, and

allocate resources effectively A strong return on assets indicates that a company hasthe financial strength and recovery to weather the challenges brought about by the

pandemic It signifies the ability to generate profits even in a challenging economic

environment This financial stability can provide businesses with the confidence andresources necessary to invest in growth initiatives and adapt to the changing marketconditions

Attracting investors and lenders: A higher return on assets can make a companymore attractive to investors and lenders It demonstrates the company's ability togenerate returns on the investments made in its assets This can facilitate access tocapital and funding, which is essential for businesses to fuel their recovery efforts, invest

in new projects, and expand their operations Business sustainability and long-termgrowth: A sustainable return on assets is crucial for the long-term growth and success

of a business It indicates that the company has a solid foundation and is well-positioned

to navigate future uncertainties By maintaining a healthy return on assets

post-COVID-19, businesses can build recovery, seize opportunities, and sustain their growth

trajectory in the evolving business landscape

Return on equity (ROE)Return on equity (ROE) is a financial metric that measures the profitability of a company

in relation to its shareholders’ equity It indicates how effectively a company is generatingprofits from the investments made by its shareholders In the context of post-COVID-19

recovery, return on equity can have a significant impact on a business's ability to recover

and thrive Investor confidence and perception: A higher return on equity signifies that acompany is generating healthy profits relative to the investments made by itsshareholders This can enhance investor confidence and perception of the company'sfinancial performance Positive investor sentiment can lead to increased investment,improved stock performance, and access to capital, which are vital for businesses torecover and grow Return on equity reflects the financial stability and risk management

practices of a company A strong ROE indicates that the company is effectively managing its financial resources and generating consistent returns This stability is crucial during

the recovery phase when businesses need to navigate uncertainties, manage cash flow,and make strategic decisions to restore profitability Companies with a higher return on

equity are generally viewed as more attractive to lenders and financial institutions A

strong ROE demonstrates the company's ability to generate returns on the shareholders’investments, which can enhance its creditworthiness and access to capital This access to

funding is essential for businesses to invest in growth initiatives, expand operations, and

recover from the financial setbacks caused by the pandemic A healthy return on equity

provides businesses with the flexibility to pursue growth opportunities and make

strategic investments It enables companies to allocate resources towards innovation,market expansion, and operational improvements, which are crucial for post-COVID-19recovery Companies with a higher ROE can capitalize on market trends, adapt tochanging customer needs, and gain a competitive edge in the recovery phase

2.2.1.2 Group inside the enterprise

Government subsidiesGovernment subsidies can play a significant role in shaping the post-COVID-19recovery for businesses Government subsidies provide much-needed financial support

to businesses that have been adversely affected by the pandemic These subsidies can

help cover operational costs, maintain cash flow, and alleviate financial strains By

providing financial assistance, governments aim to support businesses in their recoveryefforts and prevent widespread closures and job losses Subsidies can help businessessustain their operations during challenging times By reducing financial burdens,subsidies enable businesses to continue paying employees, covering rent and utilities,and maintaining essential functions This support enhances business continuity,preserves jobs, and contributes to the overall stability of the economy Government

subsidies can be targeted towards specific industries or consumer segments to

stimulate demand and boost economic activity For example, subsidies for certainproducts or services can incentivize consumers to make purchases, thereby drivingsales and supporting the recovery of businesses in those sectors By stimulating

demand, subsidies can help businesses regain momentum and rebuild their customer

base Governments may offer subsidies to encourage businesses to invest in newtechnologies, research and development, or sustainable practices These subsidies

incentivize innovation and help businesses adapt to the changing market landscape By supporting investment and innovation, subsidies contribute to the long-term recovery

and competitiveness of businesses, positioning them for sustained recovery and growth.Governments may provide targeted subsidies to industries that have been

disproportionately affected by the pandemic, such as tourism, hospitality, or small

businesses These subsidies can be tailored to address the unique challenges faced bythese sectors, such as financial losses, reduced demand, or operational restrictions By

providing sector-specific support, governments aim to facilitate the recovery of these

industries and mitigate the long-term impacts of the crisis

Macro factorsMacro factors can significantly influence the recovery process after COVID-19.The overall economic conditions, including GDP growth, inflation rates, andemployment levels, can greatly affect the recovery process Favorable economicconditions, such as strong consumer spending, increased investment, and stablefinancial markets, can promote business recovery and growth On the other hand, weakeconomic conditions may hamper recovery efforts and prolong the recovery period.Government policies and initiatives have a substantial impact on the recovery process.Fiscal and monetary policies, such as stimulus packages, tax incentives, and interest rateadjustments, can provide support to businesses and stimulate economic activity

Regulatory measures, industry-specific policies, and trade policies can also shape the

recovery trajectory for different sectors and businesses

The progress and effectiveness of vaccination programs and the implementation

of health measures play a crucial role in the recovery process Higher vaccination rates

can lead to increased consumer confidence, easing of restrictions, and a resumption ofeconomic activities Conversely, outbreaks, new variants, or slow vaccination progresscan pose risks to the recovery and necessitate continued health measures, impactingbusiness operations

Consumer behavior and sentiment are important drivers of the recovery process.Changes in consumer preferences, spending patterns, and confidence levels can shape

the demand for goods and services Understanding and responding to shifts in consumer

behavior are crucial for businesses to adapt their strategies and effectively capturemarket opportunities during the recovery phase The recovery process is influenced byglobal trade dynamics and the stability of supply chains Factors such as trade

agreements, export-import volumes, and disruptions in supply chains can impact

businesses’ ability to source inputs, reach markets, and meet customer demands.Resilient and efficient global trade and supply chain networks are vital for businesses to

recover and expand their operations.

The pandemic has accelerated digital transformation and the adoption oftechnology across industries Businesses that embrace digital technologies and

innovative solutions are better positioned for recovery and growth Access to

technology, digital infrastructure, and digital skills can influence the competitiveness

and recovery of businesses in the post-pandemic era.

It's important to recognize that these macro factors are interconnected and caninteract with each other, shaping the overall recovery landscape Monitoring andunderstanding these factors help businesses and policymakers make informeddecisions and implement strategies that support the post-COVID-19 recovery process.2.2.2 Theoretical foundations of recovery from crisis

Recovery from crisis is the actions taken in the long-term aftermath of a crisis toreturn organizational operations to their previous state and to mitigate the potentialeffects of future crises

In order to comprehend the concept of organizational recovery, it is essential totrace its development within the field of business management and explore its various

dimensions Over time, research in this area has evolved, shedding light on different

aspects of organizational recovery

The notion of organizational recovery emerged in the realm of business and

management research with the pioneering work of Staw, et al (1981) and Meyer (1982).

Their analysis focused on how organizations can effectively respond to unexpectedexternal threats, thereby highlighting processes that demonstrate the existence of theorganization itself (Linnenluecke, 2017)

Following the initial contributions of Staw, et al (1981) and Meyer (1982),advancements in technology and organizational processes have brought about increasedcomplexity, often leading to business crises This contextual backdrop has spurred

research on organizational recovery, particularly in relation to crises caused by internal

errors or failures (Linnenluecke, 2017) Within this research domain, the concept ofinternal organizational reliability has been developed, accompanied by two maintheories: the Highly Trusted Organization and the Normal Accident Theory Thesetheories examine how the accumulation of operational failures can escalate into eventswith severe consequences and ultimately result in business crises (Linnenluecke, 2017)

It is important to note that the understanding of recovery within organizational

theory varies depending on specific circumstances, giving rise to different definitions

based on the chosen approach recovery is seen as a set of fixed characteristics orattributes that define an organization as either resilient or non-resilient It is also viewed

as a dynamic process encompassing adaptive mechanisms and acquired skills that

facilitate learning and enable organizations to prevent and overcome crises Additionally,recovery is conceptualized as an outcome, representing a state that is either achieved ornot achieved after a crisis has occurred

The theoretical basis of crisis recovery is grounded in several economic andmanagement theories recovery theory suggests that individuals, organizations, andsystems have the ability to bounce back and recover from disruptive events It focuses onbuilding adaptive capacity, learning from the crisis, and developing mechanisms towithstand and recover from future shocks

Various economic theories provide insights into the recovery process TheKeynesian theory suggests that government intervention, such as fiscal stimulus andincreased public spending, can stimulate aggregate demand and boost economic recovery

The neoclassical theory emphasizes market forces and price adjustments to restore

equilibrium after a crisis

The resource-based view (RBV) highlights the role of internal resources and

capabilities in driving recovery It posits that firms with valuable, rare, and

difficult-to-imitate resources are better equipped to recover from crises The RBV emphasizesstrategic decision-making, resource allocation, and leveraging core competencies to

regain competitiveness.

The learning organization theory emphasizes the importance of organizationallearning and adaptation during and after a crisis It suggests that organizations thatactively seek feedback, experiment with new approaches, and adapt their strategies aremore likely to recover and thrive in the post-crisis period

Institutional theory emphasizes the role of formal and informal rules, norms, andstructures in shaping the recovery process It recognizes the influence of external factors,

such as government policies, industry regulations, and societal expectations, on the recovery trajectory of organizations and industries.

Network theory emphasizes the significance of interorganizational relationshipsand networks in crisis recovery It highlights the role of collaboration, coordination, andinformation sharing among organizations, stakeholders, and communities to mobilizeresources, exchange knowledge, and facilitate recovery efforts

These theoretical perspectives provide frameworks for understanding the

dynamics and processes involved in crisis recovery They help guide decision-making,

inform recovery strategies, and shape policy interventions at individual, organizational,and systemic levels However, it's important to adapt and apply these theories to thespecific context and characteristics of each crisis, considering the unique dynamics andchallenges it presents

Measuring post-crisis recovery involves assessing various factors and indicators

to gauge the extent of recovery and the return to pre-crisis conditions.One of the keymeasures of recovery is economic growth Tracking indicators such as Gross DomesticProduct (GDP), industrial production, and employment levels can provide insights intothe overall economic recovery

Monitoring the financial performance of businesses, including revenue growth,profitability, and investment levels, provides an indication of how well businesses are

recovering and adapting to post-crisis conditions.

Monitoring stock market indices, credit availability, and interest rates can provideinsights into the recovery of financial markets and investor confidence Evaluating theeffectiveness of government policies, stimulus packages, and support programs in

facilitating recovery is important Assessing the utilization of government funds and the

impact of policy measures on various sectors can indicate the progress of recovery.Different sectors may have specific indicators that reflect their recovery progress For

example, in the tourism industry, indicators such as tourist arrivals, hotel occupancy

rates, and travel bookings can be used to assess recovery

The choice of indicators may vary depending on the nature of the crisis and thespecific context Regular monitoring and analysis of these indicators can help track the

progress of recovery, identify areas that require attention, and inform policy decisions to

facilitate a successful post-crisis recovery

Chapter 3: Research And Methodology

The aviation industry has been severely affected by the COVID-19 epidemic due to

several factors Governments worldwide implemented travel restrictions and border

closures to curb the spread of the virus, resulting in a significant reduction in bothdomestic and international travel This led to a sharp decline in passenger demand,forcing airlines to cancel flights and operate with minimal capacity, causing substantial

revenue losses Concerns about health and safety, including the risk of infection during air

travel, have further decreased passenger bookings, impacting the aviation industry.Moreover, the aviation industry heavily relies on a global supply chain for aircraft parts,

maintenance, and services The pandemic disrupted these supply chains, causing delays

in aircraft maintenance and repair, which hindered airlines’ ability to operate efficiently.The tourism and business travel sectors, major sources of revenue for airlines, have beenseverely affected by lockdown measures, quarantine requirements, and reduced business

activities.

The COVID-19 pandemic has significantly impacted the tourism industry, withgovernments worldwide implementing travel restrictions and border closures tocontrol the virus's spread This has resulted in a sharp decline in both international anddomestic travel, as tourists face restrictions, quarantine measures, and health concerns.Tourism-dependent businesses, including hotels, restaurants, and attractions, havesuffered from the lack of tourist arrivals The fear of contracting the virus, uncertainty

about safety measures, and changing travel guidelines have greatly affected consumer confidence in travel Closure of tourism facilities, canceled events, and reduced business

activities have further contributed to the decline The recovery of international tourism

is dependent on factors such as the containment of the virus, widespread vaccination, and the restoration of traveler confidence.

The import and export industry has been heavily impacted by the COVID-19epidemic due to disruptions in global supply chains, decreased demand and consumerspending, trade protectionism, travel restrictions, economic uncertainty, changes in

consumer preferences, and operational challenges Lockdown measures and

restrictions on movement and trade caused delays and shortages of goods, whilereduced consumer spending and demand affected trade activities Trade protectionist

measures and border closures further disrupted global trade flows The volatility and

uncertainty created challenges in forecasting demand and managing risks Changes in

consumer preferences and increased operational costs added to the industry's

difficulties

Based on the above statements, the author has studied the factors affecting the

recovery of the three most severely damaged industries, namely aviation, tourism and import and export, as a basis for research.

3.1 Research Process

The research process commences by identifying the problem and research

objectives, followed by establishing a clear direction for the study Subsequently, an extensive exploration of relevant theories and prior empirical studies is undertaken, both

globally and within the country This stage serves as the foundation for proposing a

research model that outlines the approach and methodology for data processing Once the data collection methods have been determined, the process of gathering the required data commences Once the data has been collected, it is analyzed to derive research findings Finally, based on these findings, recommendations are formulated The research process

is detailed in the following diagram:

Figure 3.1: Diagram of the research process

Define the Determine theproblem and method and Data processing

research manner of data and analysis

objectives processing

Theoretical Based on the

research and Determine the research results,

experimental data to collect recommendations

works are made

Source: Author's compilation

3.2 Description of research variables and description of data collection methods

On the basis of previous studies and theoretical factors, the author chooses the

following research model:

Recovery = f(company size, industry, ROA before COVID, external impact)

Table 3.1: Variables in the research model

No Variable Represent Calculation

2 LEV Capital Liabilities

structure Total Assets

3 SIZE Size Log(Total Assets)

4 DS Sales Log(Sales)

5 External Few support packages - bad - 1

influences Many support packages - good - 2

Research hypothesis: