Survival and growth of women-owned and immigrant-owned businesses during the COVID-19 pandemic

Bassirou Gueye

Economic and Social Reports from Statistics Canada, Analytical Studies and Modelling Branch

Abstract: The COVID-19 pandemic has had an unprecedented impact on the Canadian economy. This impact was uneven across different workers and businesses. However, there is little information available on how businesses were affected by and survived through the pandemic according to the characteristics of their owners, especially those owned by certain groups such as women and immigrants. These businesses tend to be more financially constrained, operating more in service sectors that require in-person contacts, and hence more vulnerable to the crisis. This article uses a linkage of the monthly business openings and closures with the Canadian Employer-Employee Dynamics Database and the Canada Emergency Wage Subsidy (CEWS) to study the survival rate and employment growth of businesses by gender, and immigrant status of owners. Specifically, the goal of this analysis is to determine the survival, closure and growth rates of women-owned (WOBs) and immigrant-owned (IOBs) businesses and compare them with men-owned (MOBs) and Canadian-owned (COBs) businesses, respectively. The results suggest that CEWS take-up rates were similar between MOBs and WOBs at the aggregate level but there were some gender differences across sectors. In addition, at the business sector level, WOBs and MOBs showed comparable survival rates. However, although the gap in survival rates between MOBs and WOBs decreased compared to the pre-pandemic period, WOBs were proportionally less likely to survive than MOBs in some sectors. Furthermore, the difference in survival rates between MOBs and WOBs were generally higher among businesses that did not receive the CEWS. Finally, WOBs that did not use the CEWS were more likely to close during the first year of the pandemic than MOBs. Compared to COBs, IOBs were more commonly found in service sectors and were less inclined to use the CEWS across most sectors. Immigrant-owned businesses were also generally smaller, with over three-quarters of them employing fewer than five employees. Regardless of CEWS usage, IOBs had lower survival rates than COBs across most sectors, especially among smaller businesses. However, the survival rate of IOBs was higher than that of COBs among businesses that did not use the CEWS in the accommodation and food services sector. Among businesses that did not use the CEWS, IOBs were more prone to closure in 2020 or 2022 and less likely to expand their workforce.

Keywords: firm performance; size; diversification; scope; entrepreneurship; COVID-19 (search for similar items in EconPapers)
JEL-codes: J23 M21 (search for similar items in EconPapers)
Date: 2024-05-22
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Persistent link: https://EconPapers.repec.org/RePEc:stc:stcp8e:202400500006e

DOI: 10.25318/36280001202400500006-eng

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