Publication:
Does Better Access to Finance Help Firms Deal with the COVID-19 Pandemic? Evidence from Firm-Level Survey Data

dc.contributor.author Amin, Mohammad
dc.contributor.author Viganola, Domenico
dc.date.accessioned 2021-06-17T16:19:31Z
dc.date.available 2021-06-17T16:19:31Z
dc.date.issued 2021-06
dc.description.abstract The advent of the novel coronavirus (COVID-19) pandemic has led to a severe liquidity crunch among private firms. Yet, formal analysis of the impact of a liquidity crunch or access to finance on the performance of firms during the pandemic is limited. The present paper estimates the impact of access to finance in the period before the pandemic on the likelihood of a decline in sales of the firm during the pandemic. The results show a strong connection between the two. That is, firms with better access to finance are significantly less likely to experience a decline in sales, and this relationship is highly heterogenous. First, better access to finance reduces the likelihood of a decline in sales much more for firms that have a stronger long-standing relationship with important stakeholders such as skilled workers and input suppliers. These are firms that use more skilled relative to unskilled workers, firms in industries with a more complex network of input suppliers, and firms in countries where the cost of enforcing contracts with new input suppliers is high. Second, the impact of access to finance is less among firms that use more women relative to men workers. This is especially so in countries or societies that accord a higher value to women’s caregiving role than to their work outside the home. The paper argues that both of these heterogeneities are along expected lines and derive from the specific ways in which access to finance benefits firms in fighting the pandemic. Thus, they help to raise confidence against endogeneity concerns about the main results. en
dc.identifier http://documents.worldbank.org/curated/en/149521623695272230/Does-Better-Access-to-Finance-Help-Firms-Deal-with-the-COVID-19-Pandemic-Evidence-from-Firm-Level-Survey-Data
dc.identifier.uri http://hdl.handle.net/10986/35767
dc.language English
dc.publisher World Bank, Washington, DC
dc.relation.ispartofseries Policy Research Working Paper;No. 9697
dc.rights CC BY 3.0 IGO
dc.rights.holder World Bank
dc.rights.uri http://creativecommons.org/licenses/by/3.0/igo
dc.subject ACCESS TO FINANCE
dc.subject FIRM PERFORMANCE
dc.subject SALES REVENUE
dc.subject CORONAVIRUS
dc.subject COVID-19
dc.subject PANDEMIC RESPONSE
dc.subject LIQUIDITY CRUNCH
dc.title Does Better Access to Finance Help Firms Deal with the COVID-19 Pandemic? Evidence from Firm-Level Survey Data en
dc.type Working Paper en
dc.type Document de travail fr
dc.type Documento de trabajo es
dspace.entity.type Publication
okr.date.disclosure 2021-06-14
okr.doctype Publications & Research
okr.doctype Publications & Research :: Policy Research Working Paper
okr.docurl http://documents.worldbank.org/curated/en/149521623695272230/Does-Better-Access-to-Finance-Help-Firms-Deal-with-the-COVID-19-Pandemic-Evidence-from-Firm-Level-Survey-Data
okr.guid 149521623695272230
okr.identifier.doi 10.1596/1813-9450-9697
okr.identifier.externaldocumentum 090224b0886e3d73_1_0
okr.identifier.internaldocumentum 33174935
okr.identifier.report WPS9697
okr.imported true en
okr.language.supported en
okr.pdfurl http://documents.worldbank.org/curated/en/149521623695272230/pdf/Does-Better-Access-to-Finance-Help-Firms-Deal-with-the-COVID-19-Pandemic-Evidence-from-Firm-Level-Survey-Data.pdf en
okr.topic Finance and Financial Sector Development :: Access to Finance
okr.topic Health, Nutrition and Population :: Disease Control & Prevention
okr.topic Macroeconomics and Economic Growth :: Business Cycles and Stabilization Policies
okr.topic Private Sector Development :: Private Sector Economics
okr.topic Social Protections and Labor :: Skills Development and Labor Force Training
okr.unit Global Indicators Group, Development Economics
relation.isSeriesOfPublication 26e071dc-b0bf-409c-b982-df2970295c87
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