Globally Engaged Firms in the COVID-19 Crisis
This paper analyzes the initial impact and recovery of globally engaged firms from the COVID-19 crisis. It uses rich survey data of nearly 65,000 firm-year observations in 45 countries spanning three waves of data collection. The findings are organ...
| Main Authors: | , , , , |
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| Language: | English |
| Published: |
World Bank, Washington, DC
2022
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/099358404042267302/IDU0ee5e862a091220479d0ab0a016c582c2bd2a http://hdl.handle.net/10986/37272 |
| Summary: | This paper analyzes the initial
impact and recovery of globally engaged firms from the
COVID-19 crisis. It uses rich survey data of nearly 65,000
firm-year observations in 45 countries spanning three waves
of data collection. The findings are organized in a series
of stylized facts, which suggest that although the pandemic
had an immediate adverse impact on most firms, the globally
engaged ones are recovering faster, possibly due to their
higher capabilities. Among globally engaged firms, those
directly involved with international markets show better
recovery than the ones that were indirectly involved. These
results mask wide variation by firm traits, sectoral
attributes, and country characteristics. At the core of the
recovery of globally engaged firms is their heightened
response to the crisis by finding novel ways to adapt supply
chains even in the presence of lockdowns and uncertainty.
These firms swiftly digitalized, introduced new products and
changed their markets and sources of inputs. Over and above
their capabilities, global engagement cushions firms against
shocks. Policymakers could therefore facilitate global
linkages by providing information on potential markets and
products, by making production flexible in terms of
facilitating remote work, reducing the rigidity of
contracts; and incentivizing financial institutions to issue
instruments that reduce uncertainty risk. |
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