Policy Support and Firm Performance During the COVID-19 Pandemic: Evidence from Colombia

Accesible PDF image
Peer Reviewed icon Peer Reviewed
Date issued
Dec 2022
Subject
Small Business;
Coronavirus;
Pandemic;
Telework;
Labor Force;
Economy;
Loan Operation;
Firm Performance;
Lockdown
JEL code
D22 - Firm Behavior: Empirical Analysis;
L20 - Firm Objectives, Organization, and Behavior: General;
L25 - Firm Performance: Size, Diversification, and Scope;
O10 - Economic Development: General
Country
Colombia
Category
Working Papers
The pandemic hit the Colombian economy as hard as other countries. Using a novel Business Pulse Survey, this paper tests the effect of government support and COVID-19 cases on firms performance. A one-standard-deviation increase in government support (in periods in which the pandemics intensity was average) increased the percentage of firms reporting normal operations by 4.8 percent. Political demonstrations in spring 2021, however, reduced the percentage by 13 percent each month they lasted. Firms' financial distress also counters the impact of government support, suggesting the need to ease firms' access to financial markets. Last, we show that investing in digital solutions improved firms' performance but remote work degraded it.
Generative AI enabled