It is well known that the COVID shock hit firms hard, on average, but beyond a focus on the average firm, how did the COVID shock hit firms at the upper quantiles (the high-growth superstars) or at the lower quantiles (already-struggling firms that may be fighting for their lives)? This exploratory paper applies graphical techniques and quantile regression to analyse the effect of the COVID shock on the full growth rates distribution. Regarding growth of sales and growth of value added, COVID had a negative effect on growth all across the growth rates distribution. The negative COVID effect is slightly larger at the lower quantiles. For employment growth we see no effect for many firms that have zero employment growth, but at the extreme quantiles we can observe that some declining firms were adversely affected by COVID. For labour productivity growth, the COVID effect is relatively small. Analysis of subsamples, as well as quantile regressions with interaction terms, emphasize that firms that received policy support were relatively more strongly affected by the COVID shock, consistent with the interpretation that COVID policy support was reaching the intended recipients.
COAD Alexander;
BAUER Peter;
DOMNICK Clemens;
HARASZTOSI Peter;
PAL Rozalia;
TERUEL Mercedes;
2026-05-06
EMERALD GROUP PUBLISHING LTD.
JRC133116
1462-6004 (online),
https://publications.jrc.ec.europa.eu/repository/handle/JRC133116,
10.1108/JSBED-02-2023-0061 (online),
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