Organizational Resources, Country Institutions, and National Culture behind Firm Survival and Growth during COVID-19

Yu Liu, Mike W. Peng, Zuobao Wei, Jian Xu and L. Colin Xu
Authors registered in the RePEc Author Service: Lixin Colin Xu

No 9633, Policy Research Working Paper Series from The World Bank

Abstract: This paper provides one of the first comprehensive and most updated studies on the effects of firms’ organizational resources, country institutions, and national culture on the survival and growth of private firms around the world during the COVID-19 pandemic. Analyzing World Bank Enterprise Follow-up Surveys on COVID-19 that cover 18,770 firms in 36 countries, the paper documents four sets of findings. (1) During the pandemic, firms with favorable organizational resources (state ownership and affiliation with parent companies) are more likely to survive and grow, whereas firms with foreign ownership or more financial obstacles are less likely to survive or grow. Firms in countries with a higher per capita income, a lower COVID-19 spread, and a less stringent COVID-19 control policy are more likely to survive and grow. (2) Favorable ownership and parent-company affiliations help cushion the pandemic shock during the pandemic. (3) The relationship between firm characteristics and firm survival/growth is significantly affected by the stringency of a country’s COVID-19 policy. (4) Firm survival and growth are positively related to a country’s cultural tendency in terms of long-term orientation and are not significantly related to uncertainty avoidance and individualism. The overall quality of country governance is negatively linked to the odds for firm survival as well as revenue and employment growth.

Keywords: Financial Sector Policy; Access to Finance; Macroeconomic Management; Public Health Promotion (search for similar items in EconPapers)
Date: 2021-04-15
New Economics Papers: this item is included in nep-cfn and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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