Pandemic and SMEs in an emerging country

Serie

• Working Papers CIDE

Resumen

• In this paper, we analyze the impact of the COVID-19 pandemic on the sales and expenditures of small and medium-sized businesses in Mexico. Using a novel survey that captures the economic conditions and expectations before and during the pandemic, we also incorporate electricity billing data as a proxy for economic activity and as a revealed measure of firms' flexibility in reducing costs. We examine these variables in relation to firms' characteristics, adaptation strategies, and expectations during the pandemic. Our analysis employs non-parametric tests and a set of econometric models, revealing a significant decline in sales alongside limited flexibility in expenditures. The effects vary depending on the strategies firms adopt to cope with the crisis and their negative expectations regarding a quick return to normality. Consequently, most SMEs face a precarious economic situation, highlighting the need for new policies and strategies to enhance their survival prospects in emerging economies such as Mexico.

autores

• Bejarano, Hernán
• Hancevic, Pedro I.
• Núñez, Héctor

fecha de publicación

• 2024

Área temática

• D22 - Comportamiento de la empresa: análisis empíricos
• L20 - Objetivos, organización y comportamiento de la empresa: Generalidades
• Q41 - Energía: Oferta y demanda; Precios

Enfoque geográfico

• Mexico  Country
• North America  Continent

Líneas de investigación

• COVID-19
• activity restrictions
• electricity consumption
• emerging countries
• small and medium-sized enterprises (SME)

Issue

• 639