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The Resilience of SMEs and Large Firms in the COVID-19 Pandemic: A Decomposition Analysis

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dc.contributor.authorAmin, Mohammad
dc.contributor.authorJolevski, Filip
dc.contributor.authorIslam, Asif M.
dc.date.accessioned2023-09-12T15:54:29Z
dc.date.available2023-09-12T15:54:29Z
dc.date.issued2023-09-12
dc.description.abstractThis study analyzes the difference in the decline in sales between small and medium-size enterprises and large firms (the “gap”) following the outbreak of COVID-19 in 19 developing countries. The decline in sales as a percentage of the pre-pandemic level was bigger for small and medium-size enterprises by 12.2 percentage points. The paper uses the Kitagawa-Oaxaca-Blinder and quantile decomposition methods to estimate individual factors’ contributions to the gap at the mean and across the sales decline distribution. Several important results emerge. First, relative to large firms, small and medium-size enterprises faced greater incidence of input supply disruptions during the pandemic, had lower initial labor productivity levels, and were concentrated in country-industry cells with a bigger sales declines. These differences in the level of factors widened the gap. Small and medium-size enterprises also suffered more than large firms from a given level of financial constraints, input supply disruptions, and country-industry-specific factors, and benefitted less from a given level of initial labor productivity. These differences in the returns to factors also widened the gap. Second, the gap was much larger at the relatively high quantiles of sales decline distribution, indicating that relative to large firms, small and medium-size enterprises were much less resilient to large shocks than small shocks. Third, individual factors’ contribution to the gap varied across the sales decline distribution. Thus, the optimal policy mix depends on the size of the shock. Fourth, there were some important differences between geographical regions in what drove the gap. Thus, an eclectic policy approach is needed that duly accounts for the prevailing local conditions.en
dc.identifierhttp://documents.worldbank.org/curated/en/099310009082313020/IDU058d313900c5b004ec80b3f3062ea60f8268d
dc.identifier.doi10.1596/1813-9450-10562
dc.identifier.urihttps://openknowledge.worldbank.org/handle/10986/40338
dc.languageEnglish
dc.language.isoen
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper; 10562
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttps://creativecommons.org/licenses/by/3.0/igo/
dc.subjectSMES
dc.subjectCRISIS
dc.subjectCOVID-19
dc.subjectFIRM SIZE
dc.subjectDECOMPOSITION
dc.subjectRESILIENCE
dc.titleThe Resilience of SMEs and Large Firms in the COVID-19 Pandemicen
dc.title.subtitleA Decomposition Analysisen
dc.typeWorking Paper
dspace.entity.typePublication
okr.crossref.titleThe Resilience of SMEs and Large Firms in the COVID-19 Pandemic: A Decomposition Analysis
okr.date.disclosure2023-09-08
okr.date.doiregistration2025-04-07T09:00:23.925507Z
okr.date.doiregistration2025-04-08T16:31:08.073666Z
okr.date.doiregistration2025-04-09T03:09:37.003983Z
okr.date.lastmodified2023-09-08T00:00:00Zen
okr.doctypePolicy Research Working Paper
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/099310009082313020/IDU058d313900c5b004ec80b3f3062ea60f8268d
okr.guid099310009082313020
okr.identifier.docmidIDU-58d31390-c5b0-4ec8-b3f3-62ea60f8268d
okr.identifier.doi10.1596/1813-9450-10562
okr.identifier.externaldocumentum34158035
okr.identifier.internaldocumentum34158035
okr.identifier.reportWPS10562
okr.import.id1743
okr.importedtrueen
okr.language.supporteden
okr.pdfurlhttp://documents.worldbank.org/curated/en/099310009082313020/pdf/IDU058d313900c5b004ec80b3f3062ea60f8268d.pdfen
okr.topicInternational Economics and Trade::Competition Policy
okr.topicPrivate Sector Development::Competitiveness and Competition Policy
okr.topicPrivate Sector Development::Small and Medium Size Enterprises
okr.unitEnterprise Analysis-WB (DECEA)
okr.unitOffice of the Chief Economist (MNACE)
relation.isAuthorOfPublicationa811f38c-2de2-5ccd-907b-8c99fc4a5039
relation.isAuthorOfPublication.latestForDiscoverya811f38c-2de2-5ccd-907b-8c99fc4a5039
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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