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Insolvency Prospects Among Small-and-Medium-Sized Enterprises in Advanced Economies: Assessment and Policy Options
Author:
Mr. Federico J Diez
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Mr. Romain A Duval
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https://orcid.org/0000-0002-2775-7172
,
Jiayue Fan https://isni.org/isni/0000000404811396 International Monetary Fund

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Jose M Garrido https://isni.org/isni/0000000404811396 International Monetary Fund

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Sebnem Kalemli-Ozcan https://isni.org/isni/0000000404811396 International Monetary Fund

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Chiara Maggi https://isni.org/isni/0000000404811396 International Monetary Fund

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Mr. Maria Soledad Martinez Peria https://isni.org/isni/0000000404811396 International Monetary Fund

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Mr. Nicola Pierri
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https://orcid.org/0000-0002-3120-9670
Series:
Staff Discussion Notes
Volume/Issue:
Volume 2021: Issue 002
Language:
English
Publication Date:
02 Apr 2021
DOI:
https://doi.org/10.5089/9781513574561.006
ISBN:
9781513574561
ISSN:
2617-6750
Pages:
28
Keywords:
Insolvency; Bankruptcy; “Quasi” Equity Injections; Small- and medium-size enterprises; COVID-19; insolvent firm; cash position; equity injection; illiquid firm; firm exit; cash flow; Solvency; Small and medium enterprises; Stocks; Financial statements; Southern Europe; Asia and Pacific
Legal-disclaimer:
Staff Discussion Notes (SDNs) showcase policy-related analysis and research being developed by IMF staff members and are published to elicit comments and to encourage debate.The views expressed in this Policy Discussion Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy.
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The COVID-19 pandemic has increased insolvency risks, especially among small and medium enterprises (SMEs), which are vastly overrepresented in hard-hit sectors. Without government intervention, even firms that are viable a priori could end up being liquidated—particularly in sectors characterized by labor-intensive technologies, threatening both macroeconomic and social stability. This staff discussion note assesses the impact of the pandemic on SME insolvency risks and policy options to address them. It quantifies the impact of weaker aggregate demand, changes in sectoral consumption patterns, and lockdowns on firm balance sheets and estimates the impact of a range of policy options, for a large sample of SMEs in (mostly) advanced economies.
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Cover Staff Discussion Notes
Staff Discussion Notes
ISSN:
2617-6750
Publisher:
International Monetary Fund