Firm Recovery during COVID-19 : Six Stylized Facts

Building on prior work that documented the impact of COVID-19 on firms in developingcountries using the first wave of Business Pulse Surveys, this paper presents a new set of stylized facts on firmrecovery, covering 65,000 observations in 38 countries. This paper suggests that: One, since the outset of the pandemic,some aspects of business performance such as sales show signs of partial recovery. Two, other aspects remainchallenging, including persistently high uncertainty and financial fragility. Three, recovery is heterogeneous acrossfirms and more sensitive to firm-level attributes such as size, sector, and initial productivity than to country-leveldifferences in the severity of the initial shock. In particular, larger and more productive firms are recoveringfaster, with implications for competition policy and allocative efficiency. Four, the decline in jobs has beensteeper during the initial shock than the expansion in employment during recovery, raising the risk of a"jobless" recovery pattern. Five, the diffusion of digital technology and product innovation accelerated duringthe pandemic but did so unevenly, further widening gaps between small and large firms. Six, businesses now have moreaccess to policy support, but poorer countries continue to lag behind and appropriate targeting of firms remains a challenge.