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The impact of Covid-19 on US firms

Author

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  • Nicholas Bloom
  • Robert S. Fletcher
  • Ethan Yeh

Abstract

We use survey data on an opt-in panel of around 2,500 US small businesses to assess the impact of COVID-19. We find a significant negative sales impact that peaked in Quarter 2 of 2020, with an average loss of 29% in sales. The large negative impact masks significant heterogeneity, with over 40% of firms reporting zero or a positive impact, while almost a quarter report losses of more than 50%. These impacts also appear to be persistent, with firms reporting the largest sales drops in mid-2020 still forecasting large sales losses a year later in mid-2021. In terms of business types, we find that the smallest offline firms experienced sales drops of over 40% compared to less than 10% for the largest online firms. Finally, in terms of owners, we find female and black owners reported significantly larger drops in sales. Owners with a humanities degree also experienced far larger losses, while those with a STEM degree saw the least impact.

Suggested Citation

  • Nicholas Bloom & Robert S. Fletcher & Ethan Yeh, 2021. "The impact of Covid-19 on US firms," POID Working Papers 009, Centre for Economic Performance, LSE.
    • Handle: RePEc:cep:poidwp:009
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    References listed on IDEAS

    as
    1. Barrero, Jose Maria & Bloom, Nick & Davis, Steven J., 2020. "Why Working From Home Will Stick," SocArXiv wfdbe, Center for Open Science.
    2. Altig, David & Barrero, Jose Maria & Bloom, Nicholas & Davis, Steven J. & Meyer, Brent & Parker, Nicholas, 2022. "Surveying business uncertainty," Journal of Econometrics, Elsevier, vol. 231(1), pages 282-303.
    3. Georgij Alekseev & Safaa Amer & Manasa Gopal & Theresa Kuchler & JW Schneider & Johannes Stroebel & Nils Wernerfelt, 2020. "The Effects of Covid-19 on U.S. Small Businesses: Evidence from Owners, Managers, and Employees," CESifo Working Paper Series 8578, CESifo.
    4. Scott R. Baker & Nicholas Bloom & Steven J. Davis & Kyle J. Kost & Marco C. Sammon & Tasaneeya Viratyosin, 2020. "The Unprecedented Stock Market Impact of COVID-19," NBER Working Papers 26945, National Bureau of Economic Research, Inc.
    5. Claudia Hupkau & Barbara Petrongolo, 2020. "Work, Care and Gender during the COVID‐19 Crisis," Fiscal Studies, John Wiley & Sons, vol. 41(3), pages 623-651, September.
    6. Adams-Prassl, Abi & Boneva, Teodora & Golin, Marta & Rauh, Christopher, 2020. "Inequality in the impact of the coronavirus shock: Evidence from real time surveys," Journal of Public Economics, Elsevier, vol. 189(C).
    7. Forsythe, Eliza & Kahn, Lisa B. & Lange, Fabian & Wiczer, David, 2020. "Labor demand in the time of COVID-19: Evidence from vacancy postings and UI claims," Journal of Public Economics, Elsevier, vol. 189(C).
    8. Simon Mongey & Laura Pilossoph & Alex Weinberg, 2020. "Which Workers Bear the Burden of Social Distancing Policies?," Working Papers 2020-51, Becker Friedman Institute for Research In Economics.
    9. Simon Mongey & Laura Pilossoph & Alexander Weinberg, 2021. "Which workers bear the burden of social distancing?," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 19(3), pages 509-526, September.
    10. Catherine Buffington & Carrie Dennis & Emin Dinlersoz & Lucia Foster & Shawn Klimek, 2020. "Measuring the Effect of COVID-19 on U.S. Small Businesses: The Small Business Pulse Survey," Working Papers 20-16, Center for Economic Studies, U.S. Census Bureau.
    11. Jose Maria Barrero & Nicholas Bloom & Steven J. Davis, 2020. "COVID-19 Is Also a Reallocation Shock," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 51(2 (Summer), pages 329-383.
    12. Sebnem Kalemli-Ozcan & Pierre-Olivier Gourinchas & Veronika Penciakova & Nick Sander, 2020. "COVID-19 and SME Failures," IMF Working Papers 2020/207, International Monetary Fund.
    13. Gourinchas, Pierre-Olivier & Kalemli-Özcan, Sebnem & Penciakova, Veronika & Sander, Nick, 2022. "Estimating SME Failures in Real Time: An Application to the COVID-19 Crisis," CEPR Discussion Papers 15323, C.E.P.R. Discussion Papers.
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    More about this item

    Keywords

    Covid-19; US firms; offline firms; online firms;
    All these keywords.

    JEL classification:

    • E0 - Macroeconomics and Monetary Economics - - General
    • J0 - Labor and Demographic Economics - - General
    • L0 - Industrial Organization - - General

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