Abstract
Our paper aims to investigate the impact of COVID-19 on private sector companies in terms of sales, production, finance and employment. We check whether the country and industry in which companies operate, government financial support and loan access matter to the behaviour and performances of companies during the pandemic. We use a microdata set from a worldwide survey of more than 15,729 companies conducted between April and September 2020 by the World Bank. Logistic regression is used to assess which factors increase the likelihood of businesses suffering due to the COVID-19 pandemic. Our results show that COVID-19 negatively impacts the performance of companies in almost all countries analysed, but a stronger effect is observed among firms from developing countries. The pandemic is more harmful to firms providing services than those representing the manufacturing sector. Due to the pandemic, firms suffer mainly in sales and liquidity decrease rather than employment reduction. The increase in the number of temporary workers is an important factor that significantly reduces the probability of sales, exports or supply decline. The analysis results indicate policy tools supporting enterprises during the pandemic, such as increasing the flexibility of the labour market or directing aid to developing countries.
Highlights
The coronavirus pandemic has spread to nearly every country on the planet
Our paper aims to examine the impact of COVID-19 on private sector firms, and it is in line with quickly expanding studies on COVID-19 implications at the micro-level
We assumed that services and manufacturing were not affected by the effects of the pandemic, as the restrictions introduced in these sectors were different
Summary
The coronavirus pandemic has spread to nearly every country on the planet. As policymakers struggle with new lockdown policies to combat the virus’s spread, national economies pay the cost. Far fewer analyses relate to the impact of the COVID-19 pandemic on the economic activities of companies. Few studies analyse the determinants of the impact of the COVID-19 pandemic on the economic activity of firms. Despite large companies and small and medium-sized enterprises (SMEs) affected by the pandemic, all studies show that the impact on SMEs is much more significant [25,42]. Our paper analyses whether the country and industry in which firms operate, government financial support and access to credit impact their behaviour and performance during the pandemic. COVID-19, to measure the impact of the COVID-19 pandemic on the private sector This survey is part of the Enterprise Survey (ES.), a flagship firm-level survey of a representative sample of an economy’s private sector that the World Bank has conducted since the.
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