Technology and Resilience

Xavier Cirera, Diego Comin, Marcio Cruz, Kyung Min Lee and Jesica Torres ()

No 16885, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper estimates the impact of technology sophistication pre-COVID-19 on the performance of firms during the early stages of the pandemic. We exploit a unique data covering firms from Brazil, Senegal, and Vietnam using a treatment effect mediation framework to decompose the results into a direct and an indirect effect. Increasing pre-pandemic technology sophistication by one standard deviation is associated with 3.8pp higher sales. Both effects are positive, but the direct effect is about 5 times larger than the indirect effect. The total effect on sales is markedly nonlinear with significantly smaller estimates of the reduction in sales for firms with more sophisticated pre-pandemic technology. Our results are robust to different measures of digital responses and matching estimators.

Date: 2022-01
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Working Paper: Technology and Resilience (2022)
Working Paper: Technology and Resilience (2022)
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