IDEAS home Printed from
   My bibliography  Save this paper

Pandemic Panic? Effects of Health System Capacity on Firm Confidence During COVID-19


  • Gopalakrishnan, Balagopal
  • Lim, Jamus Jerome
  • Mohapatra, Sanket


In this study, we examine the impact of health system capacity and government responses on firms’ business confidence in response to the COVID-19 pandemic. Using a sample of firm-level data from 53 countries, we find that ex ante proactive measures—such as health spending by the public and private sectors and availability of medical staff—have a favorable impact on the firms’ perceptions of risk and sentiment. This effect reduces as the number of COVID-19 cases rise, possibly as a result of the drain on a country’s health resources. We also find that the ex post reactive measures—such as health and containment actions, and the overall quality of government response—also play a role in bolstering business confidence. These effects vary by firm size and the level of development of the economy, and are largely impervious to prior epidemic experience.

Suggested Citation

  • Gopalakrishnan, Balagopal & Lim, Jamus Jerome & Mohapatra, Sanket, 2021. "Pandemic Panic? Effects of Health System Capacity on Firm Confidence During COVID-19," IIMA Working Papers WP 2021-07-02, Indian Institute of Management Ahmedabad, Research and Publication Department.
  • Handle: RePEc:iim:iimawp:14656

    Download full text from publisher

    File URL:
    File Function: English Version
    Download Restriction: no

    References listed on IDEAS

    1. Sanjay Basu & Jason Andrews & Sandeep Kishore & Rajesh Panjabi & David Stuckler, 2012. "Comparative Performance of Private and Public Healthcare Systems in Low- and Middle-Income Countries: A Systematic Review," PLOS Medicine, Public Library of Science, vol. 9(6), pages 1-14, June.
    2. James E. Neumann & Jacqueline Willwerth & Jeremy Martinich & James McFarland & Marcus C. Sarofim & Gary Yohe, 2020. "Climate Damage Functions for Estimating the Economic Impacts of Climate Change in the United States," Review of Environmental Economics and Policy, University of Chicago Press, vol. 14(1), pages 25-43.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Emma Akpan & Surajudeen Abiola Abdulrahman & Nne Pepple, 2020. "Comparison of the Level of Adherence to Laboratory Quality Management System between Public and Private Secondary Health Facilities in Southern Nigeria," Global Journal of Health Science, Canadian Center of Science and Education, vol. 12(12), pages 1-27, November.
    2. Tafesse, Wiktoria & Chalkley, Martin, 2021. "Faith-based provision of sexual and reproductive healthcare in Malawi," Social Science & Medicine, Elsevier, vol. 282(C).
    3. Zoe Dettrick & Hebe N Gouda & Andrew Hodge & Eliana Jimenez-Soto, 2016. "Measuring Quality of Maternal and Newborn Care in Developing Countries Using Demographic and Health Surveys," PLOS ONE, Public Library of Science, vol. 11(6), pages 1-20, June.
    4. Titeca, Hannes, 2016. "Healthcare Spending: The Role of Healthcare Institutions from an International Perspective," MPRA Paper 73678, University Library of Munich, Germany.
    5. Beaussier, Anne-Laure & Demeritt, David & Griffiths, Alex & Rothstein, Henry, 2020. "Steering by their own lights: Why regulators across Europe use different indicators to measure healthcare quality," Health Policy, Elsevier, vol. 124(5), pages 501-510.
    6. Sulakshana Nandi & Helen Schneider & Priyanka Dixit, 2017. "Hospital utilization and out of pocket expenditure in public and private sectors under the universal government health insurance scheme in Chhattisgarh State, India: Lessons for universal health cover," PLOS ONE, Public Library of Science, vol. 12(11), pages 1-18, November.
    7. Juliet Mwanga-Amumpaire & Tobias Alfvén & Celestino Obua & Karin Källander & Richard Migisha & Cecilia Stålsby Lundborg & Grace Ndeezi & Joan Nakayaga Kalyango, 2021. "Appropriateness of Care for Common Childhood Infections at Low-Level Private Health Facilities in a Rural District in Western Uganda," IJERPH, MDPI, vol. 18(15), pages 1-16, July.
    8. Sujha Subramanian & Robai Gakunga & Joseph Kibachio & Gladwell Gathecha & Patrick Edwards & Elijah Ogola & Gerald Yonga & Naftali Busakhala & Esther Munyoro & Jeremiah Chakaya & Nancy Ngugi & Nyawira , 2018. "Cost and affordability of non-communicable disease screening, diagnosis and treatment in Kenya: Patient payments in the private and public sectors," PLOS ONE, Public Library of Science, vol. 13(1), pages 1-16, January.
    9. Busato, Francesco & Chiarini, Bruno & Cisco, Gianluigi & Ferrara, Maria, 2021. "Greta Thunberg effect and Business Cycle Dynamics: A DSGE model," MPRA Paper 110141, University Library of Munich, Germany.
    10. Iasmina Petrovici & Mihaela Ionica & Octavian C. Neagoe, 2021. "Economic Crisis: A Factor for the Delayed Diagnosis of Breast Cancer," IJERPH, MDPI, vol. 18(8), pages 1-10, April.
    11. Kiplagat, Isabella & Mugo, Mercy & Oleche, Martine O., 2021. "Provider Process Quality of Healthcare and its Determinants in Kenya," African Journal of Economic Review, African Journal of Economic Review, vol. 9(4), September.
    12. Idrissa Beogo & Chieh-Yu Liu & Yiing-Jenq Chou & Chuan-Yu Chen & Nicole Huang, 2014. "Health-Care-Seeking Patterns in the Emerging Private Sector in Burkina Faso: A Population-Based Study of Urban Adult Residents in Ouagadougou," PLOS ONE, Public Library of Science, vol. 9(5), pages 1-11, May.
    13. Jaqueline Hansen & Antonia Reinecke & Hans-Jörg Schmerer, 2021. "Health Expenditures and the Effectiveness of Covid-19 Prevention in International Comparison," CESifo Working Paper Series 9069, CESifo.
    14. Smithers, Daniel & Waitzkin, Howard, 2022. "Universal health coverage as hegemonic health policy in low- and middle-income countries: A mixed-methods analysis," Social Science & Medicine, Elsevier, vol. 302(C).
    15. Raut, Nirmal Kumar & Tanaka, Ryuichi, 2021. "Monitoring health services delivery: Evidence from civil conflict in Nepal," World Development, Elsevier, vol. 146(C).
    16. Elio Borgonovi & Paola Adinolfi & Rocco Palumbo & Gabriella Piscopo, 2018. "Framing the Shades of Sustainability in Health Care: Pitfalls and Perspectives from Western EU Countries," Sustainability, MDPI, vol. 10(12), pages 1-20, November.
    17. Sarah Tougher & Kara Hanson & Catherine A. Goodman, 2021. "Does subsidizing the private for‐profit sector benefit the poor? Evidence from national antimalarial subsidies in Nigeria and Uganda," Health Economics, John Wiley & Sons, Ltd., vol. 30(10), pages 2510-2530, September.
    18. Leonard, David K. & Bloom, Gerald & Hanson, Kara & O’Farrell, Juan & Spicer, Neil, 2013. "Institutional Solutions to the Asymmetric Information Problem in Health and Development Services for the Poor," World Development, Elsevier, vol. 48(C), pages 71-87.
    19. Jacob Assa & Cecilia Calderon, 2020. "Privatization and Pandemic: A Cross-Country Analysis of COVID-19 Rates and Health-Care Financing Structures," Working Papers 2008, New School for Social Research, Department of Economics.
    20. Mariano Gallo & Mario Marinelli, 2020. "Sustainable Mobility: A Review of Possible Actions and Policies," Sustainability, MDPI, vol. 12(18), pages 1-39, September.

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iim:iimawp:14656. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.