COVID-19: El impacto del choque externo sobre las economías de la región andina

Cassou, Javier Díaz; Maldonado, Paul Carrillo; Moreno, Kenji

doi:10.18235/0002457

Cited by 6 publications

(6 citation statements)

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“…In the third quarter of 2020, Bolivian exports fell by 29% in value and 5% in volume compared to the same period in 2019 (IBCE, 2020b). To represent the shock of declining global demand for Bolivian exports, moderate and severe scenarios have been designed (see, e.g., Diaz‐Cassou et al (2020) for different economic scenarios for the Andean region of South America).…”

Section: Scenarios and Key Resultsmentioning

confidence: 99%

Gender and Covid‐19: Are women bearing the brunt? A case study for Bolivia

Escalante

Maisonnave

2021

J of Intl Development

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The coronavirus pandemic (COVID‐19) is threatening the well‐being of citizens in most countries of the world; however, women and men could be affected in different ways. This study uses a gender‐sensitive computable general equilibrium model linked to a micro model to assess the impacts of COVID‐19 in Bolivia. The results reveal negative effects for all economic agents. Female‐headed households in general and those headed by unskilled women in particular are the most affected, as they experience significant reductions in employment and the largest increases in household burdens. This increases poverty and inequality for more women than men.

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Section: Scenarios and Key Resultsmentioning

confidence: 99%

Gender and Covid‐19: Are women bearing the brunt? A case study for Bolivia

Escalante

Maisonnave

2021

J of Intl Development

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“…2.2 COVID-19 pandemic lockdown and creation of new formal firms: the Ecuadorian case Ecuador, a country that does not have its currency and is dollarized, has been characterized as a producer and trader of raw materials, being less commercially and financially integrated into the global economy, which puts the country in a situation of high vulnerability with respect to global demand and commodity shocks (Carrillo-Maldonado and Díaz-Cassou, 2019;Díaz-Cassou et al, 2020). In addition, the country has a large number of micro-, small-and medium-sized companies (95% of total formal firms) and a few large firms (5%) (Ruiz-Arranz and Deza, 2018;Superintendency of Companies, Securities and Insurance, 2018).…”

Section: Theoretical Background 21 Crisis Shocks Business Cycle and C...mentioning

confidence: 99%

“…In particular, the contribution relies on how the COVID-19 lockdown-induced policy could affect business creation for the first time (to the author’s knowledge). Studies on the impact of the COVID pandemic on the economy mostly focused on the macro-level (Couch et al , 2020; Díaz-Cassou et al , 2020; ECLAC, 2020; OECD, 2020). In addition, most of the papers that analyze the creation of new formal firm crisis (or shocks, or over the business cycle) use Dynamic Stochastic General Equilibrium models; instead, in this paper, we exploit the exogenous characteristic of the lockdown policy induced by COVID-19 to assess its impact on the creation of new formal firms.…”

Section: Introductionmentioning

confidence: 99%

Turbulence in start-ups: short-term effect of COVID-19 lockdown on creation of new firms and its capital

Camino‐Mogro

Marcos

Solano

2022

JEEE

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Purpose Business creation is an important measure of real economic activity as it shows the dynamics with which new firms are born, create jobs, move their capital, innovate and compete with old firms. In this sense, this paper aims to analyze the short-term impact of the lockdown policies implemented to stop the spread of the COVID-19 on the creation of new formal firms in Ecuador. Design/methodology/approach This paper uses a regression discontinuity in time (RDiT) design jointly with official administrative real-time data. This data is collected by the supervisory and regulatory institution of formal companies in Ecuador. The authors use real-time data from January 13, 2020, to May 15, 2020. This period allows to use the President’s order of effective lockdown on March 16, 2020, as the exogenous event. This gives 43 working days on each side of the cutoff date on the baseline model. Findings The authors find: an overall large drop in the creation of new formal firms (−73%) and a decrease in the total amount of initial capital coming from the new formal firms (−40%). Additionally, the results suggest that the negative impact of the COVID-19 lockdown on the creation of new formal firms seems not to decrease in the short term. The main conclusion is that lockdown policies have a negative impact on firm creation, a result that is of high policy relevance and can be a tool to design business attraction policies. Research limitations/implications The analysis is carried out in a short period because on May18, 2020, a new policy was applied in Ecuador that allowed firms to be created more quickly, with 1 USD of capital, and 1 shareholder, among other benefits, and this may affect the outcomes analyzed in this document, so extending the analysis of the impact of the lockdown to a longer period could result in biased results due to this policy. Additionally, studying daily sales would be of the utmost importance; however, these data are not found in the database of the supervising institution. Practical implications This study contributes to the empirical literature and the policy debate in various aspects. First, it is important to generate facilities for the creation of new formal firms, from the reduction of days it takes to create one (using technology as a support in this matter) to the decrease of the minimum capital to formalize a company. Second, improve the business conditions of the new formal firms that were born during the pandemic, but also that these conditions create stimulus for the creation of new companies. Third, the authors show that induced-lockdown policies have a negative impact on the creation of new formal firms and the total amount of initial capital from new formal firms; this effect could be a full-blown recession if governments do not apply mechanisms to revert this situation that could be a drag on the economy. Originality/value This paper opens the debate on the effects of the COVID-19 lockdown on the creation of new formal firms; therefore, future research could study the impact in a broader time window to analyze medium and long-run effects, but also in different economic sectors and in the effects on firm bankruptcy, which added to an analysis of job loss, will show a total effect of damage in the economy.

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“…Furthermore, the country has very low levels of FDI, so the COVID‐19 pandemic might aggravate the structural problems of this country. Díaz‐Cassou et al ( 2020 ) confirm that the external shock derived from COVID‐19 is leading to a significant recession in Ecuador and that in 2020 and 2021, a contraction of between 7.1% and 11.4% could occur, generating a procyclical fiscal response.…”

Section: Introductionmentioning

confidence: 98%

“…However, in the last 5 years, there has been a slowdown in FDI flows in the region. 1 The decrease in recent years and the fact that FDI is related to the boom of commodities and the end of the super-cycle of commodities demonstrates that FDI flows are strongly linked to external shocks, which places the countries of the region in a situation of high vulnerability (Carrillo-Maldonado & Díaz-Cassou, 2019;Díaz-Cassou et al, 2020). Specifically, exporters of commodities, with few FDI flows and/or high external financing requirements, are more vulnerable to those external shocks.…”

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confidence: 99%

Short‐term effects of COVID‐19 lockdown on foreign direct investment: Evidence from Ecuadorian firms

Camino‐Mogro

Armijos

2021

J of Intl Development

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We exploit the exogenous variation that comes from the COVID‐19 and the subsequent lockdown in Ecuador. We estimate a regression discontinuity in time (RDiT) design using official administrative FDI data from January to May 2020. We observe an overall large decrease in FDI inflows. We assess differences across FDI sources and find stronger effects coming from capital increases compared with new firm constitutions. In addition, we find that the negative effects are mostly from inflows coming from North and South American investments. We also assess whether partial reopening of activities positively affects FDI. We do not find any significant effect.

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COVID-19: El impacto del choque externo sobre las economías de la región andina

Cited by 6 publications

References 1 publication

Gender and Covid‐19: Are women bearing the brunt? A case study for Bolivia

Gender and Covid‐19: Are women bearing the brunt? A case study for Bolivia

Turbulence in start-ups: short-term effect of COVID-19 lockdown on creation of new firms and its capital

Short‐term effects of COVID‐19 lockdown on foreign direct investment: Evidence from Ecuadorian firms

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