The Impact of COVID-19 Containment Lock Downs on MSMEs in India and Resilience of Exporting Firms

37 Pages Posted: 29 Apr 2022 Last revised: 10 May 2022

See all articles by Yutong Chen

Yutong Chen

University of Virginia - Department of Economics

Sisir Debnath

Indian Institute of Technology Delhi

Sheetal Sekhri

Department of Economics, University of Virginia

Vishal Sekhri

Independent

Date Written: April 21, 2022

Abstract

This study uses data from a survey of micro, small, and medium enterprises in India to document the impact of COVID-19 containment lockdowns on firms, their responses, and adaptation strategies. We find that profits and sales of the majority of firms declined substantially. Temporary closures, pay cuts, and temporary lay-offs were the key measures utilized by firms to cope with the shock. Firms did not have adequate liquidity to last beyond six months, albeit the majority expected the pandemic to be over within that period. Micro-enterprises were the most fragile. Using a retrospective panel and matching-based difference-in-differences strategy, we show that exporting firms were able to cushion themselves from the domestic market contractions resulting from the lockdown.

Keywords: COVID-19, Pandemics, MSMEs, Export, India

Suggested Citation

Chen, Yutong and Debnath, Sisir and Sekhri, Sheetal and Sekhri, Vishal, The Impact of COVID-19 Containment Lock Downs on MSMEs in India and Resilience of Exporting Firms (April 21, 2022). Available at SSRN: https://ssrn.com/abstract=4096256 or http://dx.doi.org/10.2139/ssrn.4096256

Yutong Chen (Contact Author)

University of Virginia - Department of Economics ( email )

237 Monroe Hall
P.O. Box 400182
Charlottesville, VA 22904-418
United States

Sisir Debnath

Indian Institute of Technology Delhi ( email )

Department of Humanities and Social Sciences
Hauz Khas
New Delhi, DE Delhi 110016
India

HOME PAGE: http://https://sites.google.com/a/virginia.edu/sisir-debnath

Sheetal Sekhri

Department of Economics, University of Virginia ( email )

P.O. Box 400182
Charlottesville, VA 22904-4182
United States

Vishal Sekhri

Independent ( email )

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