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Technological capacity and firms' recovery from Covid-19

Author

Listed:
  • Sebastian Doerr
  • Magdalena Erdem
  • Guido Franco
  • Leonardo Gambacorta
  • Anamaria Illes

Abstract

Can higher technological capacity help firms to recover quicker from recessions? Analyzing the effects of the Covid-19 pandemic on firm revenues in several countries, we find that firms headquartered in jurisdictions with better digital infrastructure generated relatively higher revenue during the shock period. Improving a country's technological capability by one standard deviation is associated with a relative increase in revenues of the average firm by around 4%. The positive effect of technology is more pronounced among smaller firms, suggesting that it could have helped the recovery of SMEs.

Suggested Citation

  • Sebastian Doerr & Magdalena Erdem & Guido Franco & Leonardo Gambacorta & Anamaria Illes, 2021. "Technological capacity and firms' recovery from Covid-19," BIS Working Papers 965, Bank for International Settlements.
    • Handle: RePEc:bis:biswps:965
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    More about this item

    Keywords

    Covid-19; pandemic; information technology; crisis; recovery.;
    All these keywords.

    JEL classification:

    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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