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© 2022 International Monetary Fund
WP/22/201
IMF Working Paper
Asia and the Pacific Department
Unpacking Impact of COVID-19 on Vietnamese Firms: Evidence from a Novel Survey Prepared by Era Dabla-Norris, Anh Thi Ngoc Nguyen, Yuanyan Sophia Zhang,1 Thuy Dinh Pham, Nga Huong Phi, Duong Thuy Nguyen, and Tuan Danh Duong
Authorized for distribution by Era Dabla-Norris
September 2022
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.
ABSTRACT: Using a unique representative panel survey of Vietnamese enterprises in 2020, we find that the pandemic and associated government support package had a heterogenous impact across firms. The government support package, particularly tax cuts and deferrals, helped alleviate short term stress, but tight ineligibility criteria and cumbersome procedures impacted take-up. Econometric analysis suggests that the likelihood of accessing support was associated with firm size, with larger firms more likely to receive support compared to smaller firms, even after controlling for sector, firm ownership and financial health. Credit support was effective in alleviating liquidity constraints and allaying firm pessimism only for large firms. Interestingly, firms experiencing sales losses and those with lower pre-crisis productivity were more likely to resort to digitalization, suggesting that the pandemic could help narrow productivity gaps.
| JEL Classification Numbers: | G30, G38, H71, L25, L53 |
| Keywords: | COVID-19; policy support; firms’ coping strategies; digitalization |
| Author’s E-Mail Address: | edablanorris@imf.org, anguyen4@imf.org, yzhang@imf.org, duongnt@gso.gov.vn, ngaph@gso.gov.vn, tuandd@gso.gov.vn |
| JEL Classification Numbers: | G30, G38, H71, L25, L53 |
| Keywords: | COVID-19; policy support; firms’ coping strategies; digitalization |
| Author’s E-Mail Address: | edablanorris@imf.org, anguyen4@imf.org, yzhang@imf.org, duongnt@gso.gov.vn, ngaph@gso.gov.vn, tuandd@gso.gov.vn |
Title Page
WORKING PAPERS
Unpacking Impact of COVID-19 on Vietnamese Firms: Evidence from a Novel Survey
Prepared by Era Dabla-Norris, Anh Thi Ngoc Nguyen, Yuanyan Sophia Zhang, Thuy Dinh Pham, Nga Huong Phi, Duong Thuy Nguyen, and Tuan Danh Duong
Table of Contents
1. Introduction
2. Data and Empirical Approach
Survey Description
Empirical Approach
3. Survey Results at First Glance
Impact of COVID-19 on Business Activities
Response to the Crisis: Self Coping Strategies and Government Support
4. Empirical results
Likelihood of Receiving Government Support
Effectiveness of Government Support
What Firms Engaged in Digitalization?
5. Concluding Remarks
References
The authors are grateful to Nguyen Thi Van Anh for the excellent coordination, Anne-Marie Gulde-Wolfe, Francois Painchaud, and participants at the IMF APD department seminar, the Interdepartmental Working Group on Corporate Sector Issues, and the General Statistics Office of Vietnam seminar for discussions. All remaining errors are our own.