System Relevance and Firm Performance Due to COVID-19

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 16606

Classification and Topics

• Classification: Wirtschaft ; Crisis Management ; Firm Performance: Size, Diversification, and Scope
• Subject: system relevance ; industry shocks ; firm performance ; COVID-19

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Böhm, Michael Johannes ; Qendrai, Pamela
• Event: Veröffentlichung
• (who): Institute of Labor Economics (IZA)
• (where): Bonn
• (when): 2023

Further information

• Handle: http://hdl.handle.net/10419/282733
• Last update: 10.03.2025, 11:43 AM CET