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© 2022 International Monetary Fund
WP/22/210
IMF Working Paper
Asia and Pacific Department
Digitalization and Resilience
Prepared by Alexander Copestake, Julia Estefania-Flores and Davide Furceri1
Authorized for distribution by Jay Peiris
October 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
This paper investigates the role of digitialization in improving economic resilience. Using balance sheet data from 24,000 firms in 75 countries, and a difference-in-differences approach, we find that firms in industries that are more digitalized experience lower revenue losses following recessions. Early data since the outbreak of the COVID-19 pandemic suggest an even larger effect during the resulting recessions. These results are robust across a wide range of digitalization measures—such as ICT input and employment shares, robot usage, online sales, intangible assets and digital skills listed on online profiles—and several alternative specifications.
| JEL Classification Numbers: | E22; E32; G39; O33. |
| Keywords: | Resilience; Digitalization; Recessions; Firms; Local Projection. |
| Author’s E-Mail Address: | ACopestake@imf.org; JEstefaniaflores@imf.org; DFurceri@imf.org |
| JEL Classification Numbers: | E22; E32; G39; O33. |
| Keywords: | Resilience; Digitalization; Recessions; Firms; Local Projection. |
| Author’s E-Mail Address: | ACopestake@imf.org; JEstefaniaflores@imf.org; DFurceri@imf.org |
Title Page
WORKING PAPERS
Digitalization and Resilience
Prepared by Alexander Copestake, Julia Estefania-Flores and Davide Furceri.
Table of Contents
I. Introduction
II. Data
A. Firm-level data
B. Recessions and other macroeconomic data
C. Digitalization measures
III. Empirical Methodology
IV. Results
A. Historical Recessions
B. The COVID-19 Pandemic
V. Robustness Checks
A. Alternative digitalization measures
B. Alternative recession dummies
C. Alternative samples
D. Alternative methodology
VI. Conclusion
References
Tables and Figures
Annex 1:Data
Annex 2: Additional Results
Alexander Copestake is an Economist in the IMF Asia Pacific Department; Julia Estefania-Flores is a Research Analyst in the IMF Asia Pacific Department; Davide Furceri is a Deputy Division Chief in the Asia Pacific Department of the IMF. We thank participants in various seminars for their valuable comments and suggestions.