Andrés Fernández (Banco Central)

Anatomy of Firms’ Margins of Adjustment: Evidence from the COVID Pandemic

Coautores: Elías Albagli, Juan Guerra-Salas y Federico Huneeus

Abstract: We trace the real effects of the pandemic shock on the universe of firms in Chile using a unique dataset. The rich administrative information that we use allows us to identify a set of stylized facts on firms’ margins of adjustment in the wake of the shock and throughout the economy’s recovery path along several dimensions: entry and exit, sales, suppliers’ links, labor, investment, credit, and productivity. We document considerable heterogeneity in this adjustment across firm size and industry. Importantly, we also study the role of public policies aimed at supporting credit and protecting employment relations. Results point to significant adjustments by firms along several markets and margins (extensive and intensive) throughout the crisis and ongoing recovery. Policies that supported credit to firms and protected employment mitigated these adjustments and played a role in the recovery of firms’ sales, their exit and re-entry decisions, and employment. A corollary of credit policies is a considerable increase in firms’ leverage.

Datos del Seminario

Fecha de inicio:
25 de Marzo, 2022 | 12:00 hrs.

Fecha de término
25 de Marzo, 2022 | 13:30 hrs.