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The impact of COVID-19 on SMEs in China: Textual analysis and empirical evidence

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  • Sun, Yunchuan
  • Zeng, Xiaoping
  • Zhao, Han
  • Simkins, Betty
  • Cui, Xuegang

Abstract

This paper investigates the impact of COVID-19 on small and medium-sized firms (SMEs) in China with textual and empirical analyses. We find that most SMEs suffered financially. The main causes of SMEs’ financial problems are postponed work resumption, declining market demand, and restrictions on logistics and crowd flow. We uncover key factors that reduce the negative effects and in some cases benefitted SMEs during the pandemic. Our empirical results also demonstrate that the negative impacts of the pandemic are reduced for value-type firms, state-owned firms, and those situated in cities with high-level digitization.

Suggested Citation

  • Sun, Yunchuan & Zeng, Xiaoping & Zhao, Han & Simkins, Betty & Cui, Xuegang, 2022. "The impact of COVID-19 on SMEs in China: Textual analysis and empirical evidence," Finance Research Letters, Elsevier, vol. 45(C).
    • Handle: RePEc:eee:finlet:v:45:y:2022:i:c:s1544612321002786
    DOI: 10.1016/j.frl.2021.102211
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    References listed on IDEAS

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    Cited by:

    1. García-Suaza, A & Rodríguez-González, D & Sarango, A & Mayorga, J. D & Pretel, A & Husain-Talero, S & Zarama, L & Urbano, J. C., Girón, D., Medina, N, 2022. "Los impactos de la inclusión financiera en los micronegocios: factores que explican aumentos en los ingresos y crecimiento de los negocios," Documentos de Trabajo 20418, Universidad del Rosario.
    2. Li, Biao & Mousa, Saeed & Reinoso, Johanna Rosali Reyes & Alzoubi, Haitham M. & Ali, Anis & Hoang, Anh Duong, 2023. "The role of technology innovation, customer retention and business continuity on firm performance after post-pandemic era in China’s SMEs," Economic Analysis and Policy, Elsevier, vol. 78(C), pages 1209-1220.
    3. Iyer, Subramanian Rama & Simkins, Betty J., 2022. "COVID-19 and the Economy: Summary of research and future directions," Finance Research Letters, Elsevier, vol. 47(PB).
    4. Fasano, Francesco & Javier Sánchez-Vidal, F. & La Rocca, Maurizio, 2022. "The role of government policies for Italian firms during the COVID-19 crisis," Finance Research Letters, Elsevier, vol. 50(C).
    5. Sun, Yang & Tang, Xinwei, 2022. "The impact of digital inclusive finance on sustainable economic growth in China," Finance Research Letters, Elsevier, vol. 50(C).

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