Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/249465 
Year of Publication: 
2021
Series/Report no.: 
ADBI Working Paper No. 1286
Publisher: 
Asian Development Bank Institute (ADBI), Tokyo
Abstract: 
Since the first quarter of 2020, micro, small, and medium-sized enterprises (MSMEs) in developing countries have faced significant hardship due to the economic shocks related to the COVID-19 pandemic. Questions arise, however, regarding the extent to which MSMEs' hardship has varied between sectors and between countries over time, whether it is gender neutral, whether the digitalization of MSMEs could alleviate it, and whether government support has reached MSMEs. This paper aimed to answer these questions using new survey data from eight developing Asian countries around the middle and toward the end of 2020. We found a wide variation in the severity of and responses to the pandemic impacts on MSMEs between sectors and between countries. Turning to common trends, our significant findings were as follows. First, MSMEs' sales and non-permanent employment tended to recover toward late 2020. Second, despite the general trend, the pandemic shocks concentrated on hard-hit industries, such as food processing, textiles, tourism, food and drink services, and education, which even deteriorated in the second half of 2020. Third, women-led enterprises remained vulnerable, exhibiting bleak prospects for sales or more job cuts than men-led but otherwise similar enterprises. Fourth, the digitalization intensity had a nonlinear relationship with MSMEs' sales and employment, suggesting that online sales beyond a certain threshold, around 40% of the total sales, could generate more revenues and jobs for MSMEs. Last, the number of MSMEs receiving support from their governments increased in the second half of 2020. Still, such support did not effectively reach the most affected or vulnerable MSMEs.
Subjects: 
COVID-19
micro
small
and medium-sized enterprises (MSMEs)
layoffs
cash shortage
digitalization
JEL: 
D22
J63
L25
O53
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Working Paper

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