Productivity and Firm Exit during the COVID-19 Crisis : Cross-Country Evidence
This paper examines whether the economic crisis induced by the COVID-19 pandemic exhibits a Schumpeterian “cleansing” of less productive firms. Using firm-level data for 31 economies, the study finds that less productive firms have a higher probabi...
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okr-10986-356322021-06-02T05:10:47Z Productivity and Firm Exit during the COVID-19 Crisis : Cross-Country Evidence Muzi, Silvia Jolevski, Filip Ueda, Kohei Viganola, Domenico FIRM SURVIVAL PRODUCTIVITY BUSINESS ENVIRONMENT INNOVATION DIGITAL ECONOMY CORONAVIRUS COVID-19 PANDEMIC IMPACT This paper examines whether the economic crisis induced by the COVID-19 pandemic exhibits a Schumpeterian “cleansing” of less productive firms. Using firm-level data for 31 economies, the study finds that less productive firms have a higher probability of permanently closing during the crisis, suggesting that the process of cleansing out unproductive arrangements may be at work. The paper also uncovers a strong and negative relationship between firm exit and innovation and digital presence, especially for small firms, confirming the relevance of the ability to adapt to market conditions as a determinant of firm survival. Finally, the study finds evidence of a negative relationship between firm exit and a burdensome business environment, as well as between firm exit and age. 2021-06-01T22:04:29Z 2021-06-01T22:04:29Z 2021-05 Working Paper http://documents.worldbank.org/curated/en/267581621869749674/Productivity-and-Firm-Exit-during-the-COVID-19-Crisis-Cross-Country-Evidence http://hdl.handle.net/10986/35632 English Policy Research Working Paper;No. 9671 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper |
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institution |
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World Bank |
language |
English |
topic |
FIRM SURVIVAL PRODUCTIVITY BUSINESS ENVIRONMENT INNOVATION DIGITAL ECONOMY CORONAVIRUS COVID-19 PANDEMIC IMPACT |
spellingShingle |
FIRM SURVIVAL PRODUCTIVITY BUSINESS ENVIRONMENT INNOVATION DIGITAL ECONOMY CORONAVIRUS COVID-19 PANDEMIC IMPACT Muzi, Silvia Jolevski, Filip Ueda, Kohei Viganola, Domenico Productivity and Firm Exit during the COVID-19 Crisis : Cross-Country Evidence |
relation |
Policy Research Working Paper;No. 9671 |
description |
This paper examines whether the economic
crisis induced by the COVID-19 pandemic exhibits a
Schumpeterian “cleansing” of less productive firms. Using
firm-level data for 31 economies, the study finds that less
productive firms have a higher probability of permanently
closing during the crisis, suggesting that the process of
cleansing out unproductive arrangements may be at work. The
paper also uncovers a strong and negative relationship
between firm exit and innovation and digital presence,
especially for small firms, confirming the relevance of the
ability to adapt to market conditions as a determinant of
firm survival. Finally, the study finds evidence of a
negative relationship between firm exit and a burdensome
business environment, as well as between firm exit and age. |
format |
Working Paper |
author |
Muzi, Silvia Jolevski, Filip Ueda, Kohei Viganola, Domenico |
author_facet |
Muzi, Silvia Jolevski, Filip Ueda, Kohei Viganola, Domenico |
author_sort |
Muzi, Silvia |
title |
Productivity and Firm Exit during the COVID-19 Crisis : Cross-Country Evidence |
title_short |
Productivity and Firm Exit during the COVID-19 Crisis : Cross-Country Evidence |
title_full |
Productivity and Firm Exit during the COVID-19 Crisis : Cross-Country Evidence |
title_fullStr |
Productivity and Firm Exit during the COVID-19 Crisis : Cross-Country Evidence |
title_full_unstemmed |
Productivity and Firm Exit during the COVID-19 Crisis : Cross-Country Evidence |
title_sort |
productivity and firm exit during the covid-19 crisis : cross-country evidence |
publisher |
World Bank, Washington, DC |
publishDate |
2021 |
url |
http://documents.worldbank.org/curated/en/267581621869749674/Productivity-and-Firm-Exit-during-the-COVID-19-Crisis-Cross-Country-Evidence http://hdl.handle.net/10986/35632 |
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1764483459750821888 |