Explaining COVID-19 shock wave mechanism in the European service industry using convergence clubs analysis

The impact of COVID-19 on the economy and business is a major issue. We define convergence clubs as countries with the same impact of COVID-19 on service turnover by using a convergence algorithm for testing and clustering. We repeat the procedure in the hospitality and food industry, information and communication, transport, and storage. The impact of COVID-19 on each convergence club identified in the study varies empirically. The findings suggest that the impact of COVID-19 varies between countries and industries depending on the firm’s agility, innovation, ownership, digital adoption, customer perception, pandemic status, and state financial assistance of companies.