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The Impacts of the COVID-19 Pandemic on Micro, Small, and Medium Enterprises in Asia and Their Digitalization Responses

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  • Sonobe, Tetsushi

    (Asian Development Bank Institute)

  • Takeda, Asami

    (Asian Development Bank Institute)

  • Yoshida, Susumu

    (Asian Development Bank Institute)

  • Truong, Hoa Thi

    (Asian Development Bank Institute)

Abstract

Soon after the outbreak of the COVID-19 pandemic, many governments began extending financial and other forms of support to micro, small, and medium-sized enterprises (MSMEs) and their workers because smaller firms are more vulnerable to negative shocks to their supply chain, labor supply, and final demand for goods and services than larger firms. Since MSMEs are diverse, however, the severity of the pandemic’s impact on them varies considerably depending on their characteristics. Using online survey data of MSMEs from eight developing economies in South, Southeast, and Northeast Asia, we attempt to deepen our understanding of the impact of the pandemic on MSMEs, especially their employment, sales revenue, and cash flow. We characterize those firms that began participating in online commerce and try to determine how their use of online commerce and their employment are related in this difficult time. We also examine the government support that MSMEs have received and the extent to which it has satisfied their support needs.

Suggested Citation

  • Sonobe, Tetsushi & Takeda, Asami & Yoshida, Susumu & Truong, Hoa Thi, 2021. "The Impacts of the COVID-19 Pandemic on Micro, Small, and Medium Enterprises in Asia and Their Digitalization Responses," ADBI Working Papers 1241, Asian Development Bank Institute.
    • Handle: RePEc:ris:adbiwp:1241
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    3. Reazul Islam & Zulkarnain Kedah & Halawati Abd Jalil Safuan & Shahrinaz Ismail, 2022. "A Conceptual Framework for Digitalising Microenterprises to Cope with the COVID-19 Pandemic," International Journal of Learning and Development, Macrothink Institute, vol. 12(2), pages 5766-5766, June.
    4. Shao, Qinglong & Kostka, Genia, 2023. "The COVID-19 pandemic and deepening digital inequalities in China," Telecommunications Policy, Elsevier, vol. 47(10).
    5. Zhou, Wuhao & Xu, Yuanlu & Zhang, Li & Lin, Huifang, 2023. "Does public behavior and research development matters for economic growth in SMEs: Evidence from Chinese listed firms," Economic Analysis and Policy, Elsevier, vol. 79(C), pages 107-119.
    6. Ziming Li & Xiangming Chen & Lei Wang, 2022. "A tale of two recoveries: uncovering the imbalance between state-driven production and private consumption in post-pandemic Wuhan, China [Evaluation of local leaders in China]," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 15(3), pages 725-746.
    7. Yoshino, Naoyuki & Siregar, Tifani Husna & Agarwal, Deepanshu & Seetha Ram, KE & Azhgaliyeva, Dina, 2022. "An Empirical Evidence and Proposal on the Spillover Effects of Information and Communication Technology Infrastructure in India," ADBI Working Papers 1330, Asian Development Bank Institute.
    8. Shah, Sayar Ahmad & Garg, Bhavesh, 2023. "Testing policy effectiveness during COVID-19: An NK-DSGE analysis," Journal of Asian Economics, Elsevier, vol. 84(C).
    9. Tanu Goyal & Mansi Kedia & Prateek Kukreja, 2022. "MSMEs Go Digital: Leveraging Technology to Sustain during the Covid-19 Crisis," Indian Council for Research on International Economic Relations (ICRIER) Report 22-r-01, Indian Council for Research on International Economic Relations (ICRIER), New Delhi, India.
    10. Chiara Franco & Filomena Pietrovito, 2024. "Drivers of firms’ digital activities in response to the Covid-19 pandemic," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 14(3), pages 695-726, September.
    11. Bai, Bing, 2023. "Fiscal stimulus and natural resource efficiency: A comprehensive approach to a green economic recovery," Resources Policy, Elsevier, vol. 86(PB).
    12. Franco, Chiara & Pietrovito, Filomena, 2024. "Drivers of firms' digital activities in response to the Covid-19 pandemic," Economics & Statistics Discussion Papers esdp24096, University of Molise, Department of Economics.
    13. Hancock, Mary Everett & Mora, Jesse, 2023. "The Impact of COVID-19 on Chinese trade and production: An empirical analysis of processing trade with Japan and the US," Journal of Asian Economics, Elsevier, vol. 86(C).
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    More about this item

    Keywords

    COVID-19; micro; small; and medium enterprises (MSMEs); layoffs; cash shortage; digitalization;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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