IDEAS home Printed from https://ideas.repec.org/a/bpj/germec/v24y2023i4p349-410n5.html
   My bibliography  Save this article

System Relevance and Firm Performance Due to COVID-19

Author

Listed:
  • Böhm Michael J.

    (TU Dortmund and IZA, Dortmund, Germany)

  • Qendrai Pamela

    (IZA and Goethe University Frankfurt, Bonn, Germany)

Abstract

We study the impact of COVID-19 on firm performance. Using financial accounts of a large number of German firms, we document that industry affiliation is an important economic dimension of the crisis. Motivated by this fact, we analyze an important industry-specific regulation, system relevance, which allows businesses to remain open in times of lockdown and other restrictions. A difference-in-differences estimation strategy shows that relative revenues of system-relevant firms increase by 6–9 percent and profits by 17–25 percent due to COVID. Controlling for channels that are arguably not driven by the system-relevance regulation, the impact on revenues decreases but remains significant. Overall, results indicate that regulations affecting the ability to operate as well as industry-level shocks play important roles for firm performance during a pandemic-induced crisis.

Suggested Citation

  • Böhm Michael J. & Qendrai Pamela, 2023. "System Relevance and Firm Performance Due to COVID-19," German Economic Review, De Gruyter, vol. 24(4), pages 349-410, December.
    • Handle: RePEc:bpj:germec:v:24:y:2023:i:4:p:349-410:n:5
    DOI: 10.1515/ger-2023-0070
    as

    Download full text from publisher

    File URL: https://doi.org/10.1515/ger-2023-0070
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.
    File URL: https://libkey.io/10.1515/ger-2023-0070?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    firm performance; industry shocks; system relevance; COVID-19;
    All these keywords.

    JEL classification:

    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:germec:v:24:y:2023:i:4:p:349-410:n:5. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyter.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.