Abstract
The coronavirus disease 2019 (COVID-19) is a global pandemic that has heavily impacted not only the health sector, but also the economic sector in general. Many countries have projected a negative economic impact, and the effect on micro-, small-, and medium-sized enterprises (MSMEs) is predicted to be significantly large. This study estimated the regional resistance of MSME sales revenues and identified the regional economic factors that affect resistance by analyzing South Korea, a country with one of the lowest economic impact projections from COVID-19. Resistance was estimated by comparing sales revenues and changes in resistance observed during the early COVID-19 period to those recorded in the same weeks (weeks 6 to 9) of 2019. The factors that affect regional resistance were determined by conducting robust regression and spatial regression analyses. The results show that the number of confirmed COVID-19 cases, a direct risk factor, is negatively related to regional resilience, while diversity is positively related to regional resistance. To improve the regional resistance against uncertain events, this study recommends increased diversity among regional industrial structures to reduce the duration of the early shock of an unexpected adverse event.
Highlights
The first case of coronavirus disease 2019 (COVID-19) was reported in December 2019, and COVID-19 was declared a pandemic by the World Health Organization on 13 March 2020
The results show that the number of confirmed COVID-19 cases, a direct risk factor, is negatively related to regional resilience, while diversity is positively related to regional resistance
This means that if the situation where COVID-19 affects the resistance of MSMEs in adjacent spaces through epidemiological transmission is considered, the regional industrial agglomeration cannot
Summary
The first case of coronavirus disease 2019 (COVID-19) was reported in December 2019, and COVID-19 was declared a pandemic by the World Health Organization on 13 March 2020. Previous studies on the economic impact of infectious diseases resulting in disasters—including SARS-COV, MERS-COV, and COVID-19—have mainly focused on the declining gross domestic product (GDP) of a country or the declining employment rate and sales in specific industries (Yang and Chen 2009; Ceylan et al 2020; Shafi et al 2020; Fairlie and Fossen 2021). They suggested policy implications that can mitigate the negative effect based on the time series analysis of the economic impact of the diseases. The existing studies related to the economic impact of COVID-19 do not reflect the differences in industrial structure at the regional level, as they were conducted at the community or village level or focused on economic impact at the national level
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