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COVID-19, Digitalization, and Firm Productivity: A Tale of MSMEs in Two Industries

Author

Listed:
  • Vinish Kathuria

    (Institute of Development Studies
    Institute of Development Studies, IIT)

  • Rajesh Raj Natarajan

    (Sikkim University)

Abstract

This study probes the role of Indian government support and digitalization in mitigating the challenges faced by MSMEs during COVID-19. The study focusses on firms in two key industries, namely, Pharmaceuticals and Textiles, from 2010 to 2022. Results show that the average productivity has declined during the COVID-19 period in both industries. Our econometric analysis does not provide convincing evidence of digitalization and government policy in improving the productivity of MSMEs. The significant heterogeneity in firm responses to pandemic-led shocks suggests that a one-size-fits-all solution is neither practical nor prudent in addressing the issues faced by firms following the COVID-19 pandemic.

Suggested Citation

  • Vinish Kathuria & Rajesh Raj Natarajan, 2024. "COVID-19, Digitalization, and Firm Productivity: A Tale of MSMEs in Two Industries," India Studies in Business and Economics,, Springer.
    • Handle: RePEc:spr:isbchp:978-981-97-8999-3_7
    DOI: 10.1007/978-981-97-8999-3_7
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    More about this item

    Keywords

    COVID-19; Government support; Digitalization; Firm productivity; MSMEs; India;
    All these keywords.

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L65 - Industrial Organization - - Industry Studies: Manufacturing - - - Chemicals; Rubber; Drugs; Biotechnology; Plastics
    • L67 - Industrial Organization - - Industry Studies: Manufacturing - - - Other Consumer Nondurables: Clothing, Textiles, Shoes, and Leather Goods; Household Goods; Sports Equipment

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