Unmasking the Impact of COVID-19 on Businesses : Firm Level Evidence from across the World

Abstract

The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.

Damaged by the Disaster: The Impact of COVID-19 on Firms in South Asia

“…In the BPS data, only 9% of South Asian firms are women-led, compared to 35% and 36% in EAP and LAC, respectively. 3 Within sectors, COVID-19 paralyzed the export-oriented tourism in Nepal and caused a massive decline in Bangladesh's ready-made-garment 1 For information on BPS, see Apedo-Amah et al (2020) and Appendix Figure A.1 for the timing of surveys in SAR. Although the survey was conducted in India along with other SAR countries, we do not divulge country specific figures for any of the outcomes.…”

“…2 COVID-19 affects firms through five distinct channels: (i) reduction in demand (ii) disruption in production and supply chains (iii) unavailability of liquidity and financial services (iv) uncertainty of the extent and time horizon of the shock, (v) lock-down restrictions (Apedo-Amah et al, 2020). 3 Moreover, the World Development Indicators (WDI) reveal that female labor force participation rate in South Asia remains low at 22% in 2020, compared to LAC (41%), EAP (43%), ECA (45%), and SSA (46%), and are likely to be concentrated in vulnerable sectors (Mukhtarova, 2020).…”

“…The findings on heterogeneity in the impact by size and sector is consistent with the global results. Using this database, Apedo-Amah et al (2020) find that more than half of micro, small, and medium firms are already in arrears or expect to fall into arrears during the coming 6 months, and that restaurants and hotels are highly fragile. Our work confirms these findings, nonetheless, underscoring that the situation in South Asia is worse.…”

“…Fourth, although, globally firms have been responding to the crisis by increasing the use of digital platforms and investing in digital solutions, South Asian firms are much less likely to increase the use of digital platforms. While 34% of businesses started to use or increased the use of digital platforms (Apedo-Amah et al, 2020), this share is merely 23% in South Asia. Similar to the global findings, large businesses have been much more effective at utilizing digital platforms than small firms: the likelihood of adoption of digital technologies by large firms was nearly double that of micro businesses.…”

COVID-19 Impact on Technical and Vocational Education and Training in Sri Lanka

“…Employers may not have advertised the new recruitment positions to retain existing workers; and young workers may have lost opportunities for employment, or delayed their participation in the labor force. For 2020, the predicted mean sales reduction in Sri Lanka due to COVID-19 is 59% compared to weeks from the peak of the COVID-19 shock (Apedo-Amah et al 2020).…”