The impact of COVID-19 on small business outcomes and expectations

By Alexander W. Bartik, Marianne Bertrand, Zoë B. Cullen, Edward L. Glaeser, Michael Luca, Christopher T. Stanton. Proceedings of the National Academy of Sciences of the United States of America, 2020

1,346 citations recorded by the source corpus.

Significance Drawing on a survey of more than 5,800 small businesses, this paper provides insight into the economic impact of coronavirus 2019 (COVID-19) on small businesses. The results shed light on both the financial fragility of many small businesses, and the significant impact COVID-19 had on these businesses in the weeks after the COVID-19–related disruptions began. The results also provide evidence on businesses’ expectations about the longer-term impact of COVID-19, as well as their perceptions of relief programs offered by the government. To explore the impact of coronavirus disease 2019 (COVID-19) on small businesses, we conducted a survey of more than 5,800 small businesses between March 28 and April 4, 2020. Several themes emerged. First, mass layoffs and closures had already occurred—just a few weeks into the crisis. Second, the risk of closure was negatively associated with the expected length of the crisis. Moreover, businesses had widely varying beliefs about the likely duration of COVID-related disruptions. Third, many small businesses are financially fragile: The median business with more than $10,000 in monthly expenses had only about 2 wk of cash on hand at the time of the survey. Fourth, the majority of businesses planned to seek funding through the Coronavirus Aid, Relief, and Economic Security (CARES) Act. However, many anticipated problems with accessing the program, such as bureaucratic hassles and difficulties establishing eligibility. Using experimental variation, we also assess take-up rates and business resilience effects for loans relative to grants-based programs.

Subfields: Accounting, Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/3edba6e5166ce842b69ba78c151e26b25343b57d

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Citations in the corpus

What Jobs are Being Done at Home During the Covid-19 Crisis? Evidence from Firm-Level Surveys (2020, positive): “4 This represents a smaller employment loss than the comparable figures in Bartik et al. (2020). The difference is explained by restricting to firms that did not completely reduce employment to 0—that is, our sampling frame for assessing the extent of remote work conditions on firms that maintain em”
Why Working from Home Will Stick (2020, neutral): “See, for example, Adams-Prassle et al. (2020), Barrero et al. (2020b), Bartik et al. (2020), Bick et al. (2020), Brynjolfsson et al. (2020), Mongey et al. (2020) and Ozimek (2020).”
Unmasking the Impact of COVID-19 on Businesses : Firm Level Evidence from across the World (2020, background): “…across countries in terms of revenue loss, business closures, mass layoffs, and liquidity (see Dai et al. (2020b) for evidence in China and Bartik et al. (2020); Humphries et al. (2020a); Adams-Prassl et al. (2020); Fairlie (2020a,b) for evidence in the United Kingdom, United States and…”
From Challenges to Creativity: Enhancing SMEs’ Resilience in the Context of COVID-19 (2021, background): “The potential long-term COVID restrictions’ impact on the business survivability was also researched in this group [33].”
The Effects of COVID-19 on U.S. Small Businesses: Evidence from Owners, Managers, and Employees (2020, positive): “Only about 65% of small businesses in our sample remained open at the end of April 2020, a number that is comparable to the 43% of businesses that reported being closed in late March 2020 in the survey studied by Bartik et al. (2020).”
The Targeting and Impact of Paycheck Protection Program Loans to Small Businesses (2020, positive): “Recent research has studied the effects of PPP loans, exploiting variation in PPP loan receipt intensity between firms of different sizes (Chetty et al. 2020, Autor et al. 2020) and locations (Granja et al. 2020, and Bartik et al. 2020c).”
Job search during the COVID-19 crisis (2020, neutral): “, 2020), and business surveys to firms (Bartik et al., 2020; Barrero et al., 2020).”
COVID-19 pandemic digitization lessons for sustainable development of micro-and small- enterprises (2021, background): “However, the lack of digitization, technology adoption, and limited online presence of MSEs has made the pandemic even more damaging for them; increasing MSEs vulnerability, especially for individuals and family businesses ( Bartik et al., 2020 ).”