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Firm-level heterogeneity in the impact of the COVID-19 pandemic

Author

Listed:
  • Alejandro Fernández-Cerezo
  • Beatriz Gonzalez
  • Mario Izquierdo Peinado
  • Enrique Moral-Benito

Abstract

This paper explores the heterogeneity across firms in the impact of and response to the COVID-19 shock. It relies on a survey conducted by Banco de España to 4,004 companies in November 2020 matched to very rich balance-sheet information on firm characteristics. According to our results, COVID-19 had a higher impact on the most vulnerable firms (small, young and less productive), and they also found more useful government policy support. Nonetheless, there were some exceptions: public loan guarantees had more difficulties reaching firms with less pre-existing debt; and furlough schemes were not able to fully protect jobs in firms with a higher share of temporary workers, which find firing more useful. While uncertainty is the key factor hindering firms’ activity, we use the announcement of the Pfizer vaccine on November 9th 2020 as a natural experiment to provide evidence that the vaccine announcement improved significantly firms’ subjective recovery expectations. This points at the importance of the communication of medical advances to guide firms’ expectations in pandemic episodes.

Suggested Citation

  • Alejandro Fernández-Cerezo & Beatriz Gonzalez & Mario Izquierdo Peinado & Enrique Moral-Benito, 2023. "Firm-level heterogeneity in the impact of the COVID-19 pandemic," Applied Economics, Taylor & Francis Journals, vol. 55(42), pages 4946-4974, September.
    • Handle: RePEc:taf:applec:v:55:y:2023:i:42:p:4946-4974
    DOI: 10.1080/00036846.2022.2133894
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    Cited by:

    1. Acebo, Enrique & Gutiérrez-López, Cristina & Abad-González, Julio & Miguel-Dávila, José-Ángel, 2026. "Lazarus, come forth! Public loan guarantees and the recovery of zombie firms," Economic Modelling, Elsevier, vol. 154(C).
    2. Honda, Tomohito & Hosono, Kaoru & Miyakawa, Daisuke & Ono, Arito & Uesugi, Iichiro, 2023. "Determinants and effects of the use of COVID-19 business support programs in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 67(C).
    3. Le, Minh-Phuong & Chauvet, Lisa & Marouani, Mohamed Ali, 2024. "The Great Lockdown and the Small Business: Impact, Channels and Adaptation to the Covid Pandemic," World Development, Elsevier, vol. 182(C).
    4. Ascari, Guido & Colciago, Andrea & Silvestrini, Riccardo, 2023. "Business dynamism, sectoral reallocation and productivity in a pandemic," European Economic Review, Elsevier, vol. 156(C).
    5. Brotherhood, Luiz & Jerbashian, Vahagn, 2023. "Firm behavior during an epidemic," Journal of Economic Dynamics and Control, Elsevier, vol. 147(C).
    6. Bighelli, Tommaso & Lalinsky, Tibor & Vanhala, Juuso, 2023. "Cross-country evidence on the allocation of COVID-19 government subsidies and consequences for productivity," Journal of the Japanese and International Economies, Elsevier, vol. 68(C).
    7. Bindal, Shradha & Joseph, Kissan & Meschke, Felix, 2025. "Corporate shutdowns in the time of Covid-19," Journal of Corporate Finance, Elsevier, vol. 92(C).
    8. Bighelli, Tommaso & Lalinsky, Tibor & Vanhala, Juuso, 2022. "Covid-19 pandemic, state aid and firm productivity," Bank of Finland Research Discussion Papers 1/2022, Bank of Finland.
    9. Bighelli, Tommaso & Lalinsky, Tibor & Vanhala, Juuso, 2022. "Covid-19 pandemic, state aid and firm productivity," Bank of Finland Research Discussion Papers 1/2022, Bank of Finland.
    10. Adelheid Holl & Ruth Rama & Hannah Hammond, 2025. "COVID-19 and Business Digitalization: Unveiling the Effects of Concurrent Strategies," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 16(4), pages 15456-15490, October.
    11. Daisuke Tsuruta, 2025. "Credit allocation and public credit guarantee schemes for small businesses: evidence from Japan," Applied Economics, Taylor & Francis Journals, vol. 57(50), pages 8267-8290, October.

    More about this item

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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