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COVID-19 and the resilience of European firms: The influence of pre-crisis productivity, digitalisation and growth performance

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  • Teruel, Mercedes
  • Amaral-Garcia, Sofia
  • Bauer, Péter
  • Coad, Alexander
  • Domnick, Clemens
  • Harasztosi, Péter
  • Pál, Rozália

Abstract

We analyse how the COVID-19 crisis impacted firms' employment levels and digitalisation efforts differently depending on their pre-crisis productivity, digitalisation and growth performance. We match the EIB Investment Survey with firm-level financial statements from the ORBIS database for 27 EU Member States and the United Kingdom. Following the sales decline during the crisis, we show that: (1) Higher productivity firms are less prone to reduce the number of employees both in the short and in the long term; (2) High-growth enterprises are also less prone to reduce the number of employees in the long term; (3) Firms in highly digitalised sectors are less likely to reduce the number of employees; (4) Firms are more likely to increase their use of digital technologies, especially those that were already more digitalised before the crisis.

Suggested Citation

  • Teruel, Mercedes & Amaral-Garcia, Sofia & Bauer, Péter & Coad, Alexander & Domnick, Clemens & Harasztosi, Péter & Pál, Rozália, 2022. "COVID-19 and the resilience of European firms: The influence of pre-crisis productivity, digitalisation and growth performance," EIB Working Papers 2022/13, European Investment Bank (EIB).
  • Handle: RePEc:zbw:eibwps:202213
    DOI: 10.2867/388751
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    Cited by:

    1. Sara Amoroso & Benedikt Herrmann & Alexander S. Kritikos, 2023. "The Role of Regulation and Regional Government Quality for High Growth Firms: The Good, the Bad, and the Ugly," Discussion Papers of DIW Berlin 2053, DIW Berlin, German Institute for Economic Research.
    2. Amoroso, Sara & Herrmann, Benedikt & Kritikos, Alexander S., 2023. "The Role of Regulation and Regional Government Quality for High Growth Firms: The Good, the Bad, and the Ugly," IZA Discussion Papers 16563, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    HGE; labour productivity; digitalisation; COVID-19; Mercedes Teruel; Sofia Amaral-Garcia; Peter Bauer; Alex Coad; Clemens Domnick; Péter Harasztosi; Rozália Pál;
    All these keywords.

    JEL classification:

    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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