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Did Digitalization Increase the Resilience of Societies During the COVID-19 Pandemic?

Author

Listed:
  • Kässi, Otto
  • Ali-Yrkkö, Jyrki
  • Hirvonen, Johannes
  • Pajarinen, Mika

Abstract

The gross domestic product of countries with high levels of digitalization decreased less during the first year of the pandemic in 2020 compared to countries with low levels of digitalization. A similar analysis using Finnish company-level data shows that the turnover of high-level digitalization companies decreased less during the pandemic than companies with low levels of digitalization. However, based on our company-level analysis, the relationship between digitalization and changes in turnover disappears when controlling for company-specific factors such as location, industry, and the economic situation prior to the pandemic. Our results do not suggest that high-readiness companies for remote work have benefited more from digitalization than companies with low remote work readiness. We also do not observe any differences between service and manufacturing companies in terms of how digitalization increases the resilience of companies.

Suggested Citation

  • Kässi, Otto & Ali-Yrkkö, Jyrki & Hirvonen, Johannes & Pajarinen, Mika, 2023. "Did Digitalization Increase the Resilience of Societies During the COVID-19 Pandemic?," ETLA Brief 119, The Research Institute of the Finnish Economy.
    • Handle: RePEc:rif:briefs:119
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    More about this item

    Keywords

    Digitalization; Pandemic resilience; Gross domestic product; Remote work; Firm level analysis;
    All these keywords.

    JEL classification:

    • E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)

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