Measuring short- and long-run impacts of COVID19 on the sharing economy and business models

Abstract

Research has highlighted the impact of COVID-19 on firms without elaborating on how the epidemic effect sharing economy and business models from both the short and long-run perspectives. Drawing on the literature-based view and the vector error-correction model, this study attempts to examine the effects of COVID-19 related factors on companies that provide or share access to goods and services that are facilitated by a community-based online platform. We argue that the government response, and the testing policy and contact tracing will promote managers to adjust their business model. In the long term, economic support, such as income support and debt relief, will reduce stuffs’ motivation to work, leading to less achievements. On the other hand, due to the strictness of policies, people will increase online activities and stimulate the sharing economy. Using Indxx data and the Oxford COVID-19 Government Response Tracker database, the analysis of time series data from 75 U.S.-listed companies provides supports for both the short-run effects of the lockdown restrictions and closures with measures, and the government response, and the long-run effects of economic support, and the strictness of lockdown-style policies. This study contributes to business management literature by elaborating upon the causality relationships of how COVID 19 related factors effect sharing economy and business models in the short and long terms. The findings benefit scholars, managers, and policymakers of modernized firms.