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Small Firms and the Pandemic: Evidence From Latin America

Author

Listed:
  • Christopher Neilson

    (Princeton University)

  • Maria Guerrero

    (UCLA)

  • John Humphries

    (Yale University)

  • Naomi Shimberg

    (Yale University)

  • Gabriel Ulyssea

    (UCL)

Abstract
This paper studies the effects of the COVID-19 pandemic on small businesses between March and November 2020 using new survey data on 35,000 small businesses in eight Latin American countries. We document that the pandemic had large negative impacts on employment and beliefs regarding the future, which in turn predict meaningful economic outcomes in the medium-term. Despite the unprecedented amount of aid, policies had limited impact for small and informal firms. These firms were less aware of programs, applied less, and received less assistance. This may have lasting consequences, as businesses that received aid reported better outcomes and expectations about the future.

Suggested Citation

  • Christopher Neilson & Maria Guerrero & John Humphries & Naomi Shimberg & Gabriel Ulyssea, 2021. "Small Firms and the Pandemic: Evidence From Latin America," Working Papers 651, Princeton University, Department of Economics, Industrial Relations Section..
    • Handle: RePEc:pri:indrel:651
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    References listed on IDEAS

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    13. Buchheim Lukas & Krolage Carla & Link Sebastian, 2022. "Sudden stop: When did firms anticipate the potential consequences of COVID-19?," German Economic Review, De Gruyter, vol. 23(1), pages 79-119, February.
    14. Granja, João & Makridis, Christos & Yannelis, Constantine & Zwick, Eric, 2022. "Did the paycheck protection program hit the target?," Journal of Financial Economics, Elsevier, vol. 145(3), pages 725-761.
    15. Wei Cui & Jeffrey Hicks & Max Norton, 2022. "How well-targeted are payroll tax cuts as a response to COVID-19? evidence from China," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 29(5), pages 1321-1347, October.
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    19. De Marco, Filippo & Core, Fabrizio, 2021. "Information Technology and Credit: Evidence from Public Guarantees," CEPR Discussion Papers 15799, C.E.P.R. Discussion Papers.
    20. Xavier Cirera & Marcio Cruz & Elwyn Davies & Arti Grover & Leonardo Iacovone & Jose Ernesto Lopez Cordova & Denis Medvedev & Franklin Okechukwu Maduko & Gaurav Nayyar & Santiago Reyes Ortega & Jesica , 2021. "Policies to Support Businesses through the COVID-19 Shock: A Firm Level Perspective [Economic Uncertainty before and during the COVID-19 Pandemic]," The World Bank Research Observer, World Bank, vol. 36(1), pages 41-66.
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    Cited by:

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    2. Cerda, Maikol & Gertler, Paul & Higgins, Sean & Montoya, Ana María & Parrado, Eric & Undurraga, Raimundo, 2023. "The Causal Impact of Covid-19 Government-backed Loans on MSMEs Liquidity and Earnings," IDB Publications (Working Papers) 12710, Inter-American Development Bank.
    3. Barbakadze, I., 2023. "With a Little Help from My Friend: Political Connections and Allocation of COVID-19 Aid," Cambridge Working Papers in Economics 2355, Faculty of Economics, University of Cambridge.
    4. Constantinescu,Ileana Cristina & Fernandes,Ana Margarida & Grover,Arti Goswami & Poupakis,Stavros & Reyes Ortega,Santiago, 2022. "Globally Engaged Firms in the COVID-19 Crisis," Policy Research Working Paper Series 9991, The World Bank.
    5. Shynar Issabayeva & Bayan Smagambet & Igor Barkhatov & Igor Okhrimenko, 2024. "A Sociological Portrait of a Family Business in Post-Soviet Economies: Challenges from the Market, Government, and Society, as well as Interaction with These Institutions in the Context of Digital Gov," Public Organization Review, Springer, vol. 24(1), pages 161-181, March.
    6. Minh-Phuong Le & Lisa Chauvet & Mohamed Ali Marouani, 2024. "The Great Lockdown and the Small Business: Impact, Channels and Adaptation to the Covid Pandemic," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-04642454, HAL.
    7. Jacob A. Jordaan, 2023. "Firm‐level characteristics and the impact of COVID‐19: Examining the effects of foreign ownership and international trade," The World Economy, Wiley Blackwell, vol. 46(7), pages 1967-1998, July.
    8. Liu, Qingfu & Shi, Chen & Tse, Yiuman & Wang, Chuanjie, 2023. "The value of communication during pandemics," Pacific-Basin Finance Journal, Elsevier, vol. 82(C).
    9. Grijalva, Diego, 2023. "Women-led firms’ performance during the Covid-19 pandemic. Evidence from an emerging economy," MPRA Paper 117225, University Library of Munich, Germany.
    10. Christina Nicolas & Nathalie Brender & David Maradan, 2023. "How Did Swiss Small and Medium Enterprises Weather the COVID-19 Pandemic? Evidence from Survey Data," JRFM, MDPI, vol. 16(2), pages 1-16, February.

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    More about this item

    Keywords

    COVID-19; small business; Latin America;
    All these keywords.

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis

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