The foundational economy and the economic resilience of Czech and Slovak regions during four recessions

Abstract

In this paper, the authors analyze the relationships between the foundational economy and the economic resilience of Czech and Slovak regions during four different waves of economic recession. The effects of specialization in the material and providential foundational economies, the automotive industry, and business services on short-term regional resistance measured by relative unemployment changes were tested during the global economic crisis (“the Great Recession”), the austerity crisis, the Covid-19 pandemic, and the Russo-Ukrainian War. The association between current and past recessions and the type of regions (old industrial, rural) and regional resilience were also examined. Spatial lag regression models showed that regional economic resilience patterns varied significantly from one economic shock to another. The effects of the foundational economy were weaker than expected and non-significant in case of the material foundational economy.