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The impact of COVID-19 on Japanese firms: mobility and resilience via remote work

Daiji Kawaguchi (), Sagiri Kitao () and Manabu Nose ()
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Daiji Kawaguchi: The University of Tokyo, Research Institute of Economy, Trade and Industry, and IZA
Manabu Nose: The International Monetary Fund and the University of Tokyo

International Tax and Public Finance, 2022, vol. 29, issue 6, No 4, 1419-1449

Abstract: Abstract Drawing on the original survey of Japanese firms during the COVID-19 pandemic, we estimate the impact of the crisis on firms’ sales, employment and hours worked per employee and roles of work-from-home (WfH) arrangements in mitigating negative effects. We find that the lowered mobility, induced by the state of emergency declared by the government and fear of infection, significantly contracted firms’ activities. On average, a 10% reduction in mobility reduced sales by 2.8% and hours worked by 2.1%, but did not affect employment. This muted employment response is consistent with limited changes in aggregate employment at the extensive margin during COVID-19 in Japan. We find that the adoption of WfH before COVID-19 mitigated the negative impact by 55% in terms of sales and by 35% in terms of hours worked. Adapting to the pandemic by increasing the number of remote work employees also helped firms moderately mitigate the negative impact on sales and work hours and reduce the probability of filing for the short-time work subsidy.

Keywords: COVID-19; Work-from-home (WfH); Firm sales; Employment; Hours worked; Short-time work; Japanese economy (search for similar items in EconPapers)
JEL-codes: H5 J5 J6 (search for similar items in EconPapers)
Date: 2022
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Working Paper: The impact of COVID-19 on Japanese firms: Mobility and resilience via remote work (2021) Downloads
Working Paper: The Impact of COVID-19 on Japanese Firms: Mobility and Resilience via Remote Work (2021) Downloads
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DOI: 10.1007/s10797-022-09749-7

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