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Policy support and firm performance during the COVID-19 pandemic: Evidence from Colombia

Author

Listed:
  • Arturo J. Galindo
  • Jorge Tovar

Abstract

The pandemic hit the Colombian economy as hard as other countries. Using the novel Business Pulse Survey, the paper test's the effect of government support and COVID-19 cases on firms' performance. A one standard deviation increase in government support at the average intensity of the pandemic increased the percentage of firms reporting normal operations by 4.8%. The Spring 2021 demonstrations, however, impacted negatively 13% each month it lasted. Firms' financial distress also counters the impact of government support, suggesting the need to complement firms' assistance with elements to ease their access to financial markets. Lastly, we show that investing in digital solutions was positively related to firms' performance but working from home had the opposite sign.

Suggested Citation

  • Arturo J. Galindo & Jorge Tovar, 2022. "Policy support and firm performance during the COVID-19 pandemic: Evidence from Colombia," Documentos CEDE 20330, Universidad de los Andes, Facultad de Economía, CEDE.
    • Handle: RePEc:col:000089:020330
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    References listed on IDEAS

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    Keywords

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    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
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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