The Great Lockdown and the Small Business: Impact, Channels and Adaptation to the Covid Pandemic

Minh-Phuong Le, Lisa Chauvet and Mohamed Marouani

World Development, 2024, vol. 182, issue C

Abstract: In this paper we estimate the effects of the pandemic on Tunisian small and medium-sized enterprises (SMEs) and examine their adaptation processes during the first lockdown. Three simultaneous shocks are examined employing a Difference-in-Differences (DID) framework applied to the national firm census: the labor input shock, the demand shock and the intermediate input shock. We show that SME performance in the first year of the crisis was heavily affected by a combination of labor input, demand and intermediate input shocks, but only the effects of the demand and intermediate input shocks persisted in the following year. Using our own firm survey, we examine three kinds of adaptation strategies: workplace and process adaptation, and trade credit. We find that firms in non-essential sectors were less able to adapt during the first lockdown, suggesting that firm adaptation seems to be more driven by capability than by necessity.

Keywords: Crisis; Covid-19; Lockdown; SME; Adaptation (search for similar items in EconPapers)
JEL-codes: D22 L25 O14 O16 (search for similar items in EconPapers)
Date: 2024
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Working Paper: The Great Lockdown and the Small Business: Impact, Channels and Adaptation to the Covid Pandemic (2024)
Working Paper: The Great Lockdown and the Small Business: Impact, Channels and Adaptation to the Covid Pandemic (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:wdevel:v:182:y:2024:i:c:s0305750x24001438

DOI: 10.1016/j.worlddev.2024.106673

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