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The impact of COVID-19 on Japanese firms: Mobility and resilience via remote work

Author

Listed:
  • Daiji Kawaguchi
  • Sagiri Kitao
  • Manabu Nose

Abstract

Drawing on the original survey of Japanese firms during the COVID-19 pandemic, we estimate the impact of the crisis on firms' sales, employment and hours worked per employee and roles of Work-from-Home (WfH) arrangements in mitigating negative effects. We find that the lowered mobility, induced by the state of emergency declared by the government and fear of infection, significantly contracted firms' activities. On average, a 10% reduction in mobility reduced sales by 2.8% and hours worked by 2.1%, but did not affect employment. This muted employment response is consistent with limited changes in aggregate employment at the extensive margin during COVID-19 in Japan. We find that the adoption of WfH before COVID-19 mitigated the negative impact by 55% in terms of sales and by 35% in terms of hours worked. Adapting to the crisis environment by increasing the number of employees working from home is also found to moderately reduce the negative impact on sales and work hours.

Suggested Citation

  • Daiji Kawaguchi & Sagiri Kitao & Manabu Nose, 2021. "The impact of COVID-19 on Japanese firms: Mobility and resilience via remote work," CAMA Working Papers 2021-71, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    • Handle: RePEc:een:camaaa:2021-71
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    File URL: https://crawford.anu.edu.au/sites/default/files/2025-07/71_2021_Kawaguchi_Kitao_Nose%280%29.pdf
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    Cited by:

    1. David R. Agrawal & Aline Bütikofer, 2022. "Public finance in the era of the COVID-19 crisis," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 29(6), pages 1349-1372, December.
    2. Cătălina Radu & Alecxandrina Deaconu & Iudith-Anci Kis & Adela Jansen & Sorina Ioana Mișu, 2023. "New Ways to Perform: Employees’ Perspective on Remote Work and Psychological Security in the Post-Pandemic Era," Sustainability, MDPI, vol. 15(7), pages 1-19, March.
    3. Bachas, Pierre & Brockmeyer, Anne & Garriga, Pablo & Semelet, Camille, 2025. "The impact of COVID-19 on formal firms: Lessons from administrative tax data," Journal of Development Economics, Elsevier, vol. 175(C).
    4. Masayuki MORIKAWA, 2025. "Telework in Japan: An Overview from Micro Data of a Large Statistical Survey," Discussion papers 25001, Research Institute of Economy, Trade and Industry (RIETI).
    5. Masayuki Morikawa, 2024. "Productivity dynamics of work from home: Firm-level evidence from Japan," Journal of Evolutionary Economics, Springer, vol. 34(2), pages 465-487, April.
    6. Hideaki Endo & Mika Goto, 2024. "Cost Inefficiency of Japanese Railway Companies and Impacts of COVID-19 Pandemic and Digital Transformation," Economies, MDPI, vol. 12(8), pages 1-37, July.
    7. Masayuki MORIKAWA, 2022. "Productivity Dynamics of Work from Home since the Onset of the COVID-19 Pandemic: Evidence from a panel of firm surveys," Discussion papers 22061, Research Institute of Economy, Trade and Industry (RIETI).
    8. Lucas Rosso & Rodrigo Wagner, 2024. "How much does mobility matter for value-added tax revenue? Cross-country evidence around COVID-19," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 31(3), pages 841-855, June.
    9. Quentin Batista & Daisuke Fujii & Taisuke Nakata & Takeki Sunakawa, 2022. "COVID-19 and Suicide in Japan," CARF F-Series CARF-F-542, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo.

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    Keywords

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    JEL classification:

    • J5 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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