Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/289970 
Year of Publication: 
2023
Series/Report no.: 
IDB Working Paper Series No. IDB-WP-1335
Publisher: 
Inter-American Development Bank (IDB), Washington, DC
Abstract: 
The COVID-19 pandemic generated a large negative external shock to the global economy. Businesses worldwide were affected by economic, health, and mobility restrictions that impacted consumers' ability to access goods and services and firms' profitability and survival rates. In this paper, we study the economic performance of Latin American MSMEs during the pandemic using disaggregated and highfrequency administrative banking deposits and income data from Brazil, Chile, Colombia, Mexico, Paraguay, and Peru. We observe a sharp short-term decline in firm earnings due to the implementation of lockdowns during the second half of March 2020. We show this decline had a heterogeneous impact by economic sector, firm size, and transaction type (in-person vs. online). Focusing on financial technology adoption by studying the migration from in-person to online banking transactions, we find that MSMEs managed to recover revenues to pre-pandemic levels in early 2021 thanks to an increased share of online transactions and that industries facing higher physical exposure to the public (e.g., retailers) experienced a more considerable decline and a slower recovery.
Subjects: 
Coronavirus
COVID-19
Latin America
Lockdowns
Smallbusinesses
Social distancing restrictions
JEL: 
H81
I18
L25
O12
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Working Paper

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