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

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dc.contributor.authorAmin, Mohammad
dc.contributor.authorViganola, Domenico
dc.date.accessioned2021-06-17T16:19:31Z
dc.date.available2021-06-17T16:19:31Z
dc.date.issued2021-06
dc.description.abstractThe 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.identifierhttp://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.doi10.1596/1813-9450-9697
dc.identifier.urihttps://hdl.handle.net/10986/35767
dc.languageEnglish
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper;No. 9697
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo
dc.subjectACCESS TO FINANCE
dc.subjectFIRM PERFORMANCE
dc.subjectSALES REVENUE
dc.subjectCORONAVIRUS
dc.subjectCOVID-19
dc.subjectPANDEMIC RESPONSE
dc.subjectLIQUIDITY CRUNCH
dc.titleDoes Better Access to Finance Help Firms Deal with the COVID-19 Pandemic? Evidence from Firm-Level Survey Dataen
dc.typeWorking Paperen
dc.typeDocument de travailfr
dc.typeDocumento de trabajoes
dspace.entity.typePublication
okr.crossref.titleDoes Better Access to Finance Help Firms Deal with the COVID-19 Pandemic? Evidence from Firm-Level Survey Data
okr.date.disclosure2021-06-14
okr.date.doiregistration2025-04-10T11:08:34.292114Z
okr.doctypePublications & Research
okr.doctypePublications & Research::Policy Research Working Paper
okr.docurlhttp://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.guid149521623695272230
okr.identifier.doi10.1596/1813-9450-9697
okr.identifier.externaldocumentum090224b0886e3d73_1_0
okr.identifier.internaldocumentum33174935
okr.identifier.reportWPS9697
okr.importedtrueen
okr.language.supporteden
okr.pdfurlhttp://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.pdfen
okr.topicFinance and Financial Sector Development::Access to Finance
okr.topicHealth, Nutrition and Population::Disease Control & Prevention
okr.topicMacroeconomics and Economic Growth::Business Cycles and Stabilization Policies
okr.topicPrivate Sector Development::Private Sector Economics
okr.topicSocial Protections and Labor::Skills Development and Labor Force Training
okr.unitGlobal Indicators Group, Development Economics
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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