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The Great Lockdown and the Small Business: Impact, Channels and Adaptation to the Covid Pandemic

Author

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  • Minh-Phuong Le

    (UP1 - Université Paris 1 Panthéon-Sorbonne, IRD - Institut de Recherche pour le Développement, DEVSOC - UMR Développement et Sociétés - UP1 - Université Paris 1 Panthéon-Sorbonne - IRD - Institut de Recherche pour le Développement)

  • Lisa Chauvet

    (UP1 - Université Paris 1 Panthéon-Sorbonne, CNRS - Centre National de la Recherche Scientifique, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, IRD - Institut de Recherche pour le Développement)

  • Mohamed Ali Marouani

    (UP1 - Université Paris 1 Panthéon-Sorbonne, IRD - Institut de Recherche pour le Développement, DEVSOC - UMR Développement et Sociétés - UP1 - Université Paris 1 Panthéon-Sorbonne - IRD - Institut de Recherche pour le Développement)

Abstract

In this paper we estimate the effects of the pandemic on Tunisian small and medium-sized enterprises (SMEs) and examine their adaptation processes during the first lockdown. Three simultaneous shocks are examined employing a Difference-in-Differences (DID) framework applied to the national firm census: the labor input shock, the demand shock and the intermediate input shock. We show that SME performance in the first year of the crisis was heavily affected by a combination of labor input, demand and intermediate input shocks, but only the effects of the demand and intermediate input shocks persisted in the following year. Using our own firm survey, we examine three kinds of adaptation strategies: workplace and process adaptation, and trade credit. We find that firms in non-essential sectors were less able to adapt during the first lockdown, suggesting that firm adaptation seems to be more driven by capability than by necessity.

Suggested Citation

  • Minh-Phuong Le & Lisa Chauvet & Mohamed Ali Marouani, 2024. "The Great Lockdown and the Small Business: Impact, Channels and Adaptation to the Covid Pandemic," Post-Print hal-04642454, HAL.
    • Handle: RePEc:hal:journl:hal-04642454
    DOI: 10.1016/j.worlddev.2024.106673
    Note: View the original document on HAL open archive server: https://hal.science/hal-04642454v1
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