How Are Small Businesses Adjusting to COVID-19? Early Evidence from a Survey

By Alexander W. Bartik, Marianne Bertrand, Zoë B. Cullen, Edward L. Glaeser, Michael Luca, Christopher T. Stanton. Social Science Research Network, 2020

829 citations recorded by the source corpus.

In addition to its impact on public health, COVID-19 has had a major impact on the economy. To shed light on how COVID-19 is affecting small businesses – and on the likely impact of the recent stimulus bill, we conducted a survey of more than 5,800 small businesses. Several main themes emerge from the results. First, mass layoffs and closures have already occurred. In our sample, 43 percent of businesses are temporarily closed, and businesses have – on average – reduced their employee counts by 40 percent relative to January. Second, consistent with previous literature, we find that many small businesses are financially fragile. For example, the median business has more than $10,000 in monthly expenses and less than one month of cash on hand. Third, businesses have widely varying beliefs about the likely duration of COVID related disruptions. Fourth, the majority of businesses planned to seek funding through the CARES act. However, many anticipated problems with accessing the aid, such as bureaucratic hassles and difficulties establishing eligibility.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/a15333db9f69bfad6c842a0d7460ca97bbc0abbd

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Citations in the corpus

The US Labor Market during the Beginning of the Pandemic Recession (2020, background): “This is qualitatively consistent with the findings of Bartik et al. (2020a) discussed above as well as Kurmann et al.”
COVID‐19 crisis and SMEs responses: The role of digital transformation (2021, background): “Forty-three percent of businesses are temporarily closed, and, on average, they have reduced their employee counts by 40% relative to January; three-quarters of small businesses stated that they have enough cash to cover maybe 2 months (Bartik et al., 2020).”
The Impact of Covid-19 on Small Business Owners: Evidence of Early-Stage Losses from the April 2020 Current Population Survey (2020, neutral): “Bartik et al. (2020) conducted a survey in late March of nearly 6,000 small businesses that were members of the Alignable business network. They find that 43 percent of businesses are temporarily closed, large reductions in employees, and the majority of businesses have less than one month of cash o”
From Challenges to Creativity: Enhancing SMEs’ Resilience in the Context of COVID-19 (2021, background): “Additionally, some studies [16,17] exposed SMEs’ financial fragility in the United States.”
Consumer Spending Responses to the COVID-19 Pandemic: An Assessment of Great Britain (2020, background): “Binder (2020) conducts an online survey on US consumers on 5th and 6th March 2020, to solicit information regarding concerns and responses to the COVID-19. The results of the survey suggest that consumers are somewhat or very concerned regarding the effects of coronavirus on their financial and pers”
Job search during the COVID-19 crisis (2020, background): “Brynjolfsson et al. (2020) and Bartik et al. (2020) use ad-hoc surveys to provide evidence for the massive switch to home-working during the first weeks of April.”
Women, Gender equality and COVID-19 (2020, background): “…the 2008 recession, principally because female-owned businesses in many countries focus on services such as health, personal care and education (OECD, 2012), the pandemic has particularly targeted businesses involving face-to-face services (Bartik et al., 2020), such as those provided by women.”
Impact of COVID-19 pandemic on micro, small, and medium-sized Enterprises operating in Pakistan (2020, positive): “A recent study conducted by Harvard Business School also reported that due to the current outbreak, many small businesses are financially fragile (Bartik et al., 2020).”
COVID-19 Is Also a Reallocation Shock (2020, background): “…shock also caused gross staffing gains: new hires equal to 3.8 percent of March 1 employment, and new contractors and leased workers equal 13 Bartik et al. (2020) find a 40 percent employment contraction from 31 January to late March/early April in their survey of American firms with fewer…”
Do Stay-at-Home Orders Cause People to Stay at Home? Effects of Stay-at-Home Orders on Consumer Behavior (2020, background): “…in consumer behavior, these effects explain only part of the dramatic changes in household spending toward the end of March 2020 (see, for example, Cox et al., 2020; Baker et al., 2020; Bartik et al., 2020; Carvalho et al., 2021; Goolsbee & Syverson, 2021; and Lewis, Mertens, & Stock, 2020).”
The Evolving Impacts of COVID-19 on Small Businesses Since the CARES Act (2020, neutral): “The most closely related work is Bartik et al. (2020), which surveys 5,800 U.”
Entrepreneurial uncertainty during the Covid-19 crisis: Mapping the temporal dynamics of entrepreneurial finance (2020, neutral): “Entrepreneurial finance deals and uncertainty Due to the high levels of uncertainty associated with finance for informationally opaque start-ups and SMEs, investors overcome this by extensive monitoring and control procedures (Kaplan and Str€omberg, 2001).”
A literature review of the economics of COVID‐19 (2020, positive): “For instance, Bartik et al. (2020) and Kurmann et al. (2020) rely on worker-firm matched daily data drawn from “Homebase,” a scheduling and time clock software provider, to construct real-time data for small businesses.”
Suffering in silence: How COVID-19 school closures inhibit the reporting of child maltreatment (2020, background): “, 2020), economic activity (Bartik et al., 2020; Hassan et al., 2020; Lewis et al., 2020), and inequalities by health access (Schmitt-Grohé et al.”