Policy Support and Firm Performance During the COVID-19 Pandemic: Evidence from Colombia

Arturo Galindo and Jorge Tovar

No 12591, IDB Publications (Working Papers) from Inter-American Development Bank

Abstract: The pandemic hit the Colombian economy as hard as other countries. Using a novel Business Pulse Survey, this paper tests the effect of government support and COVID-19 cases on firms performance. A one-standard-deviation increase in government support (in periods in which the pandemics intensity was average) increased the percentage of firms reporting normal operations by 4.8 percent. Political demonstrations in spring 2021, however, reduced the percentage by 13 percent each month they lasted. Firms' financial distress also counters the impact of government support, suggesting the need to ease firms' access to financial markets. Last, we show that investing in digital solutions improved firms' performance but remote work degraded it.

Keywords: COVID-19; Firm performance; Policies; Working from home; Policy support (search for similar items in EconPapers)
JEL-codes: D22 L20 L25 O10 (search for similar items in EconPapers)
Date: 2022-12
New Economics Papers: this item is included in nep-sbm
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Working Paper: Policy support and firm performance during the COVID-19 pandemic: Evidence from Colombia (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:idb:brikps:12591

DOI: 10.18235/0004622

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