Covid-19 Pandemic and SMEs' Performance in Latin America
The COVID-19 pandemic generated a large negative external shock to the global economy. Businesses worldwide were affected by economic, health, and mobility restrictions that impacted consumers ability to access goods and services and firms profitability and survival rates. In this paper, we study the economic performance of Latin American MSMEs during the pandemic using disaggregated and high-frequency administrative banking deposits and income data from Brazil, Chile, Colombia, Mexico, Paraguay, and Peru. We observe a sharp short-term decline in firm earnings due to the implementation of lockdowns during the second half of March 2020. We show this decline had a heterogeneous impact by economic sector, firm size, and transaction type (in-person vs. online). Focusing on financial technology adoption by studying the migration from in-person to online banking transactions, we find that MSMEs managed to recover revenues to pre-pandemic levels in early 2021 thanks to an increased share of online transactions and that industries facing higher physical exposure to the public (e.g., retailers) experienced a more considerable decline and a slower recovery.
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Inter-American Development Bank
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Subjects: | Small Business, Economy, Digital Transformation, Coronavirus, Pandemic, Lockdown, H81 - Governmental Loans • Loan Guarantees • Credits • Grants • Bailouts, I18 - Government Policy • Regulation • Public Health, L25 - Firm Performance: Size Diversification and Scope, O12 - Microeconomic Analyses of Economic Development, Coronavirus;COVID-19;Latin America;Lockdowns;Smallbusinesses;Social distancing restrictions;SMEs Revenues;Mobility Restrictions, |
Online Access: | http://dx.doi.org/10.18235/0004720 https://publications.iadb.org/en/covid-19-pandemic-and-smes-performance-latin-america |
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dig-bid-node-332622023-03-13T21:57:02ZCovid-19 Pandemic and SMEs' Performance in Latin America 2023-01-30T00:01:00+0000 http://dx.doi.org/10.18235/0004720 https://publications.iadb.org/en/covid-19-pandemic-and-smes-performance-latin-america Inter-American Development Bank Small Business Economy Digital Transformation Coronavirus Pandemic Lockdown H81 - Governmental Loans • Loan Guarantees • Credits • Grants • Bailouts I18 - Government Policy • Regulation • Public Health L25 - Firm Performance: Size Diversification and Scope O12 - Microeconomic Analyses of Economic Development Coronavirus;COVID-19;Latin America;Lockdowns;Smallbusinesses;Social distancing restrictions;SMEs Revenues;Mobility Restrictions The COVID-19 pandemic generated a large negative external shock to the global economy. Businesses worldwide were affected by economic, health, and mobility restrictions that impacted consumers ability to access goods and services and firms profitability and survival rates. In this paper, we study the economic performance of Latin American MSMEs during the pandemic using disaggregated and high-frequency administrative banking deposits and income data from Brazil, Chile, Colombia, Mexico, Paraguay, and Peru. We observe a sharp short-term decline in firm earnings due to the implementation of lockdowns during the second half of March 2020. We show this decline had a heterogeneous impact by economic sector, firm size, and transaction type (in-person vs. online). Focusing on financial technology adoption by studying the migration from in-person to online banking transactions, we find that MSMEs managed to recover revenues to pre-pandemic levels in early 2021 thanks to an increased share of online transactions and that industries facing higher physical exposure to the public (e.g., retailers) experienced a more considerable decline and a slower recovery. Inter-American Development Bank Maikol Cerda David Cervantes Paul Gertler Sean Higgins Ana María Montoya Eric Parrado Carlos Serrano Raimundo Undurraga Patricia Yáñez-Pagans IDB Publications Latin America en |
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Biblioteca Felipe Herrera del BID |
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English |
topic |
Small Business Economy Digital Transformation Coronavirus Pandemic Lockdown H81 - Governmental Loans • Loan Guarantees • Credits • Grants • Bailouts I18 - Government Policy • Regulation • Public Health L25 - Firm Performance: Size Diversification and Scope O12 - Microeconomic Analyses of Economic Development Coronavirus;COVID-19;Latin America;Lockdowns;Smallbusinesses;Social distancing restrictions;SMEs Revenues;Mobility Restrictions Small Business Economy Digital Transformation Coronavirus Pandemic Lockdown H81 - Governmental Loans • Loan Guarantees • Credits • Grants • Bailouts I18 - Government Policy • Regulation • Public Health L25 - Firm Performance: Size Diversification and Scope O12 - Microeconomic Analyses of Economic Development Coronavirus;COVID-19;Latin America;Lockdowns;Smallbusinesses;Social distancing restrictions;SMEs Revenues;Mobility Restrictions |
spellingShingle |
Small Business Economy Digital Transformation Coronavirus Pandemic Lockdown H81 - Governmental Loans • Loan Guarantees • Credits • Grants • Bailouts I18 - Government Policy • Regulation • Public Health L25 - Firm Performance: Size Diversification and Scope O12 - Microeconomic Analyses of Economic Development Coronavirus;COVID-19;Latin America;Lockdowns;Smallbusinesses;Social distancing restrictions;SMEs Revenues;Mobility Restrictions Small Business Economy Digital Transformation Coronavirus Pandemic Lockdown H81 - Governmental Loans • Loan Guarantees • Credits • Grants • Bailouts I18 - Government Policy • Regulation • Public Health L25 - Firm Performance: Size Diversification and Scope O12 - Microeconomic Analyses of Economic Development Coronavirus;COVID-19;Latin America;Lockdowns;Smallbusinesses;Social distancing restrictions;SMEs Revenues;Mobility Restrictions Inter-American Development Bank Covid-19 Pandemic and SMEs' Performance in Latin America |
description |
The COVID-19 pandemic generated a large negative external shock to the global economy. Businesses worldwide were affected by economic, health, and mobility restrictions that impacted consumers ability to access goods and services and firms profitability and survival rates. In this paper, we study the economic performance of Latin American MSMEs during the pandemic using disaggregated and high-frequency administrative banking deposits and income data from Brazil, Chile, Colombia, Mexico, Paraguay, and Peru. We observe a sharp short-term decline in firm earnings due to the implementation of lockdowns during the second half of March 2020. We show this decline had a heterogeneous impact by economic sector, firm size, and transaction type (in-person vs. online). Focusing on financial technology adoption by studying the migration from in-person to online banking transactions, we find that MSMEs managed to recover revenues to pre-pandemic levels in early 2021 thanks to an increased share of online transactions and that industries facing higher physical exposure to the public (e.g., retailers) experienced a more considerable decline and a slower recovery. |
author2 |
Maikol Cerda |
author_facet |
Maikol Cerda Inter-American Development Bank |
topic_facet |
Small Business Economy Digital Transformation Coronavirus Pandemic Lockdown H81 - Governmental Loans • Loan Guarantees • Credits • Grants • Bailouts I18 - Government Policy • Regulation • Public Health L25 - Firm Performance: Size Diversification and Scope O12 - Microeconomic Analyses of Economic Development Coronavirus;COVID-19;Latin America;Lockdowns;Smallbusinesses;Social distancing restrictions;SMEs Revenues;Mobility Restrictions |
author |
Inter-American Development Bank |
author_sort |
Inter-American Development Bank |
title |
Covid-19 Pandemic and SMEs' Performance in Latin America |
title_short |
Covid-19 Pandemic and SMEs' Performance in Latin America |
title_full |
Covid-19 Pandemic and SMEs' Performance in Latin America |
title_fullStr |
Covid-19 Pandemic and SMEs' Performance in Latin America |
title_full_unstemmed |
Covid-19 Pandemic and SMEs' Performance in Latin America |
title_sort |
covid-19 pandemic and smes' performance in latin america |
publisher |
Inter-American Development Bank |
url |
http://dx.doi.org/10.18235/0004720 https://publications.iadb.org/en/covid-19-pandemic-and-smes-performance-latin-america |
work_keys_str_mv |
AT interamericandevelopmentbank covid19pandemicandsmesperformanceinlatinamerica |
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1806237908098613248 |