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Heterogeneous Shocks in the Covid-19 Pandemic: Panel Evidence from Italian Firms

Emanuele Brancati and Raffaele Brancati

No 649, GLO Discussion Paper Series from Global Labor Organization (GLO)

Abstract: This paper contributes to the policy discussion on Covid-19 by presenting real-time evidence on the magnitude of the shock for Italian firms. We take advantage of unique panel data on 7,800 companies between January 2020 {right before the pandemic{ and March of the same year {in the midst of lockdown policies. We then exploit the revision in expectation within this short time window to capture the impact of firms' idiosyncratic shock. Our analysis shows disproportionate effects for internationalized companies and provide some evidence on supply chain contagion. We also document stronger shocks for truly innovative companies and effects on long-run growth operating through the disruption of preexisting R&D plans.

Keywords: Covid-19; Firms; Expectations; Internationalization; Innovation; Global Value Chains (search for similar items in EconPapers)
JEL-codes: D84 F00 O3 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-sbm and nep-tid
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