Assessing and Addressing the Coronavirus-Induced Economic Crisis: Evidence From 1.5 Billion Sales Invoices

63 Pages Posted: 6 Aug 2020 Last revised: 15 Mar 2024

See all articles by Zhuo Chen

Zhuo Chen

Tsinghua University - PBC School of Finance

Pengfei Li

Tsinghua University - PBC School of Finance

Li Liao

Tsinghua University - PBC School of Finance

Lu Liu

Central University of Finance and Economics (CUFE)

Zhengwei Wang

Tsinghua University - PBC School of Finance

Date Written: February 29, 2024

Abstract

We probe the effects of the COVID-19 pandemic and the subsequent containment policies on business activities in China by exploiting 1.5 billion sales invoices. Using a difference-in-differences approach, we estimate that the average drop in sales is between 23% and 35%, depending on firm size, for the 12-week period after Wuhan’s lockdown. Firms in industries requiring more intensive face-to-face interactions suffer more. Also, cities relying on investment-driven economic growth are more resilient. Lastly, governments’ economic stimulus policies are more effective for medium-sized and large firms. Our findings shed new light on the policy debates on supporting business during the pandemic.

Keywords: COVID-19, pandemic, invoices, firm sales, economic stimulus

JEL Classification: G10, D22, H12

Suggested Citation

Chen, Zhuo and Li, Pengfei and Liao, Li and Liu, Lu and Wang, Zhengwei, Assessing and Addressing the Coronavirus-Induced Economic Crisis: Evidence From 1.5 Billion Sales Invoices (February 29, 2024). China Economic Review, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3661014 or http://dx.doi.org/10.2139/ssrn.3661014

Zhuo Chen

Tsinghua University - PBC School of Finance

No. 43, Chengdu Road
Haidian District
Beijing, Beijing 100083
China

Pengfei Li (Contact Author)

Tsinghua University - PBC School of Finance ( email )

No. 43, Chengdu Road
Haidian District
Beijing 100083
China

Li Liao

Tsinghua University - PBC School of Finance ( email )

No. 43, Chengdu Road
Haidian District
Beijing 100083
China

Lu Liu

Central University of Finance and Economics (CUFE) ( email )

39 South College Road
Haidian District
Beijing, Beijing 100081
China

Zhengwei Wang

Tsinghua University - PBC School of Finance ( email )

No. 43, Chengfu Road
Haidian District
Beijing 100083
China

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