This paper examines how medium-sized meat producers across the European Union coped with the financial challenges of the COVID-19 pandemic. It focuses on the role of liquidity, trade credit, and equity leverage in shaping financial resilience. An extensive dataset covering around 2,200 firms was analyzed with an advanced heterogeneous difference-in-differences methodology.

The findings highlight that companies with stronger equity ratios and higher liquidity (quick ratio above 1.5) were significantly more resilient, sustaining profitability during the crisis. In contrast, firms with weaker liquidity and higher reliance on debt encountered severe difficulties. The study also shows that while longer trade credit terms could support returns on assets under favorable liquidity conditions, extended reliance on trade credit often reduced sales margins.

The paper’s main contribution is the innovative application of advanced econometric methods to agribusiness data, offering new insights into how liquidity and equity leverage can protect firms during crises. These results provide valuable guidance for both managers and policymakers, stressing the importance of careful liquidity management and strategic trade credit use in turbulent times.