Did the Legal Form Matter for the Level of Bankruptcy Risk of Agricultural Enterprises During the COVID-19 Pandemic?

Theoretical background: Conducting an agricultural activity during the COVID-19 pandemic became difficult due to restrictions on movement, the requirement to maintain a social distance in interpersonal contacts, restrictions on direct sales of agricultural products at the farmer markets, and, above all, due to the inability to recruit foreign seasonal workers to work with the harvest. On the other hand, despite difficult external conditions, in the years of 2020–2021 the Polish agriculture significantly increased the value of global production and sales of its products on domestic and foreign markets. Purpose of the article: This study aims to examine the strength and direction of the impact of the COVID-19 pandemic on the risk of bankruptcy of agricultural enterprises in Poland, as well as to check whether the legal form of the enterprise has a significant impact on this relationship. Research methods: The study was conducted based on financial data from the EMIS database on a sample of four thousand agricultural enterprises operating in Poland in 2014–2021. The Z-score for non-financial enterprises from EM countries was used to measure the level of enterprise bankruptcy risk. To assess the impact of the COVID-19 pandemic on the value of enterprises' Z-score, panel estimations with fixed effects, taking into account macroeconomic and enterprise-specific variables, were used. Main findings: The research showed that for the entire group of agricultural enterprises, changes in economic and regulatory conditions caused by the COVID-19 pandemic had a positive impact on their resistance to the risk of bankruptcy. A positive impact was found in all groups of enterprises, being statistically significant in the case of limited liability companies and insignificant in the case of cooperatives, joint-stock companies and other legal forms. Moreover, the increase in inflation of agricultural products and specific characteristics/parameters of enterprises, i.e. improved profitability of operations, increase in assets and the share of equity in the financing structure, as well as an increase in the use of short-term financing, had a positive impact on reducing the risk of bankruptcy. The research conclusions can be used to optimally prepare agricultural enterprises to withstand possible future external shocks. This article contributes to the literature in the following areas: the impact of the COVID-19 pandemic on the level of bankruptcy risk of Polish agricultural enterprises, as well as the impact of the legal form of an agricultural enterprise on its resistance to bankruptcy in the face of a crisis shock.