Firm-Level Expectations and Behavior in Response to the COVID-19 Crisis

Buchheim, Lukas; Dovern, Jonas; Krolage, Carla; Link, Sebastian

doi:10.2139/ssrn.3603773

Cited by 15 publications

(7 citation statements)

References 14 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Estimator a negative sales impact, in line with findings from other studies (e.g. Bartik et al, 2020;Buchheim et al, 2020). The estimated positive coefficient of the Firmage variable suggests that the negative sales impact occurs more frequently among older firms.…”

Section: Determinants Of the Occurrence Of A Negative Sales Impactsupporting

confidence: 88%

“…Firm size and international trade participation constitute the two main characteristics that several studies identify to be important. Regarding firm size, it is commonly found that SMEs have been hardest hit (Apedo-Amah et al, 2020;Buchheim et al, 2020;Fernández-Cerezo et al, 2021). Not only are SMEs overrepresented in sectors that have been affected particularly strongly (OECD, 2021), but they are also more fragile financially (Bartik et al, 2020) and they are less likely to be aware of or successfully apply for government support (Cirera et al, 2021;Guerrero et al, 2021).…”

Section: Country Sector and Firm-level Characteristicsmentioning

confidence: 99%

See 1 more Smart Citation

Firm‐level characteristics and the impact of COVID‐19: Examining the effects of foreign ownership and international trade

Jordaan

2023

World Economy

View full text Add to dashboard Cite

Using a large multi‐country firm‐level data set from the World Bank Enterprise Survey, we examine whether multinational corporations (MNCs) differ from domestic firms in the prevalence and size of the impact of COVID‐19 on sales. Our findings reveal significant differences between MNCs and domestic firms, especially when accounting for the interplay between foreign ownership and international trade. Exporting MNCs are significantly less likely to experience a negative sales impact; this finding is robust to controlling for firm characteristics including size, age and productivity and the use of a propensity score reweighting approach based on the likelihood that a firm was foreign owned prior to the onset of the pandemic. Regarding the impact of the pandemic on the level of sales decrease, trading MNCs experience a significantly smaller negative impact. However, MNCs with joint high levels of imports and exports sustain a larger negative effect. MNCs operating in countries and sectors characterised by a high degree of participation in international production networks are less affected by the pandemic. When controlling for the interaction between MNCs and international trade, we also find a direct positive effect of foreign ownership on the size of sales decrease, representing a liability of foreignness effect.

show abstract

Section: Determinants Of the Occurrence Of A Negative Sales Impactsupporting

confidence: 88%

Section: Country Sector and Firm-level Characteristicsmentioning

confidence: 99%

Firm‐level characteristics and the impact of COVID‐19: Examining the effects of foreign ownership and international trade

Jordaan

2023

World Economy

View full text Add to dashboard Cite

show abstract

“…We also contribute to the burgeoning body of economics research focused on the economic effects of the COVID‐19 pandemic. To date, research has primarily focused on how the onset of the COVID‐19 pandemic affected macroeconomic uncertainty (Altig et al 2020), forecast revisions (Bloom, Fletcher, and Yeh 2020; Buchheim et al 2020), reallocation of business activity (Barrero, Bloom, and Davis 2020), and consumer mobility patterns (Goolsbee and Syverson 2020). Our results extend these findings by demonstrating how the onset of the COVID‐19 pandemic suppressed investment in Class 8 trucks, other factors held constant.…”

Section: Discussionmentioning

confidence: 99%

“…Spot prices are theorized to positively affect capital investment since higher spot prices increase carriers’ profits (Strickland 2020a) and are indicative that contract prices—which govern ~90 percent of truckload (TL) shipments (Caplice 2007; Harding 2017)—will rise in the future (Miller, Scott, and Williams 2021). However, the rise in spot prices during 2020 took place under unprecedented economic conditions (Buchheim et al 2020), especially regarding the degree of uncertainty (Altig et al 2020). We follow Knight (1921) and view uncertainty as the “inability to forecast the likelihood of events happening” (Bloom 2014, 154) to answer the following question: since the onset of the COVID‐19, has the relationship between spot prices and capital investment by motor carriers been attenuated?…”

mentioning

confidence: 99%

The Moderating Effect of COVID-19 on the Relationship between Spot Market Prices and Capital Investment in the Motor-Carrier Sector

Miller,

Darby,

Scott

2022

Transportation Journal

View full text Add to dashboard Cite

Capital investment by motor carriers in new trucks and trailers is essential for the effective and efficient operation of supply chains. Strong evidence exists that motor carriers’ capital investment is positively correlated with truckload spot prices. This article explores whether the onset of the COVID-19 pandemic moderated the relationship between spot prices and capital investment by motor carriers. We theorize that the onset of the COVID-19 pandemic muted the relationship between spot prices and investment in trucks to a greater degree than it muted the relationship between spot prices and investment in trailers. We attribute this to the COVID-19 pandemic creating tremendous uncertainty about the availability of truck drivers, which made investing in trucks less attractive than investing in trailers that do not require additional labor. To test our theory, we assemble a time series dataset that combines proprietary and public data from several sources. Econometric estimates corroborate our predictions and are robust to instrumental variable estimation to assuage concerns about endogeneity of spot prices. We explain the implications of our findings for theory and practice.

show abstract

“…The need to diversify aid is demonstrated by the results of Buchheim et al (2020), who show that relatively weak pre-crisis companies in Germany were hit harder and tended to opt for more drastic mitigation strategies, in particular reductions in employment and investment.…”

Section: Introductionmentioning

confidence: 99%

Zombies or Still Alive. Who Took Advantage of COVID-19 State Aid?

Wiśniewski

Adamczyk

Franek

2022

View full text Add to dashboard Cite

Theoretical background: The SARS-CoV-2 pandemic has caused violent reactions from the governments of almost all countries in the world. The attempt to contain a pandemic by restricting the mobility of society has had a huge impact on people and some businesses. As a result of COVID-19 restrictions, it became necessary to introduce special state aid programs for those businesses that were most affected by these restrictions. This was also the case in Poland. We based our analysis on welfare economics (Harberger, 1971), in which government support for enterprises is legitimized when their situation would have been worse without these interventions. Purpose of the article:The aim of this article is to assess the impact of public aid granted to large companies in Poland on their financial condition. The research problem is to answer the question whether the companies that received the aid needed it. In assessing the appropriateness of aid, liquidity, debt level and profitability indices were used, which directly resulted from the objectives of COVID-19 aid granted in Poland. The added value of the study is combining the analysis of data from financial statements with information on state aid published by the Office of Competition and Consumer Protection (UOKiK). Research methods:The research sample consisted of 1,201 large Polish enterprises from the non-financial sector. The study used non-parametric statistical tests and quartile analysis. Main findings:The results show that the aid went to entities that were already in a worse financial situation before the pandemic. At the same time, it was demonstrated that the aid did not distort the market mechanism, i.e. it neither excessively improved the situation of supported entities nor significantly worsened the situation of entities that did not benefit from the aid.

show abstract

Firm-Level Expectations and Behavior in Response to the COVID-19 Crisis

Cited by 15 publications

References 14 publications

Firm‐level characteristics and the impact of COVID‐19: Examining the effects of foreign ownership and international trade

Firm‐level characteristics and the impact of COVID‐19: Examining the effects of foreign ownership and international trade

The Moderating Effect of COVID-19 on the Relationship between Spot Market Prices and Capital Investment in the Motor-Carrier Sector

Zombies or Still Alive. Who Took Advantage of COVID-19 State Aid?

Contact Info

Product

Resources

About