The Covid-19 Pandemic and its Impact on the Performance of Firms: An Analysis Based on World Bank Microdata

This study analyzes the impact on the sales of firms during the outbreak of the COVID-19 pandemic, based on microdata made available by the World Bank through the Enterprise Surveys platform, when the Covid-19 Enterprise Survey Follow-Up was conducted. The study performed a comparison of two linear regression techniques: (1) ordinary least squares with dummy variables, better understanding the average effect of the regressors on the dependent variable and; (2) quantile regression, making it possible to better identify heterogeneous effects in the sample. Controlling potential effects of heteroscedasticity to the quantile regression model, a recent and more robust control approach was employed, through the contributions of Parente and Santos Silva (2016). The intra-cluster estimator allows to obtain non-biased estimates of standard error of the parameters, presenting a more reliable result in relation to the traditional approach of Koenker and Bassett (1978). The results suggest that factors such as access to credit, government subsidies, remote work and hiring temporary workers have heterogeneous effects between firms. Permanent and full-time employees had a greater impact on firms with lower sales growth, signaling a downward trend over conditional quantiles. Government subsidies had a decreasing effect, indicating greater impact on firms with less growth (significant in the 50% and 75% quantiles). Licensed workers affected negatively in all quantiles, but with a greater impact on growth in lower quantiles, that is, in firms with less growth (significant at 1%). The actions of governments promote a "deliberate disconnection" that inevitably results in a socioeconomic crisis, unprecedented in history. These "indirect" effects of the pandemic have already been duly documented in the financial market (TOPCU and GULAL 2020). Although expectations about the potential consequences of social isolation policies have been negatively reflected, other evidence points to positive results, depending on the behavior of the public authority, acting in a transparent manner. From this analyze, it is observed that the orientation of public policies to mitigate the adverse effects of the COVID-19 pandemic should not be guided in a uniform manner. This guidance allows better control of the adverse effects of the pandemic, aiming at a better allocation of resources and a greater return in terms of social well-being.