Cover IMF Working Papers
Buy Book in Print
Digitalization and Resilience: Firm-level Evidence During the COVID-19 Pandemic
Author:
Nordine Abidi null

Search for other papers by Nordine Abidi in
Current site
Google Scholar Close
,
Mehdi El Herradi
Search for other papers by Mehdi El Herradi in
Current site
Google Scholar Close
, and
Sahra Sakha
Search for other papers by Sahra Sakha in
Current site
Google Scholar Close
Series:
IMF Working Papers
Volume/Issue:
Volume 2022: Issue 034
Language:
English
Publication Date:
18 Feb 2022
DOI:
https://doi.org/10.5089/9798400201073.001
ISBN:
9798400201073
ISSN:
1018-5941
Pages:
43
Keywords:
COVID-19; digitalization; technology adoption; economic resilience; Middle East and Central Asia; digitally-enabled firm; digitally-constrained firm; firms in the Middle East; firm-level data; digital transformation; Digitalization; Financial inclusion; Foreign corporations; Asia and Pacific; Africa; Middle East; North Africa
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
Download PDF (2 MB) Download Epub
The COVID-19 pandemic has resulted in an unprecedented shock to firms with adverse consequences for existing productive capacities. At the same time, digitalization has increasingly been touted as a key pathway for mitigating economic losses from the pandemic, and we expect firms facing digital constraints to be less resilient to supply shocks. This paper uses firm-level data to investigate whether digitally-enabled firms have been able to mitigate economic losses arising from the pandemic better than digitally-constrained firms in the Middle East and Central Asia region using a difference-in-differences approach. Controlling for demand conditions, we find that digitally-enabled firms faced a lower decline in sales by about 4 percentage points during the pandemic compared to digitally-constrained firms, suggesting that digitalization acted as a hedge during the pandemic. Against this backdrop, our results suggest that policymakers need to close the digital gap and accelerate firms’ digital transformation. This will be essential for economies to bounce back from the pandemic, and build the foundations for future resilience.
  • Collapse
  • Expand
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund