Digitalization and Resilience

Author: Alexander Copestake, Julia Estefania-Flores, and Davide Furceri

Volume/Issue: Volume 2022 Issue 210

Publication date: October 2022

ISBN: 9798400225697

$20.00

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Topics covered in this book

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Economics- Macroeconomics , Economics / General , Resilience , Digitalization , Recessions , Firms , Local Projection , digitalization measure , macroeconomic data , balance sheet data , outbreak of the COVID-19 pandemic , revenue loss , employment share , Economic recession , COVID-19 , Global

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Summary

This paper investigates the role of digitialization in improving economic resilience. Using balance sheet data from 24,000 firms in 75 countries, and a difference-in-differences approach, we find that firms in industries that are more digitalized experience lower revenue losses following recessions. Early data since the outbreak of the COVID-19 pandemic suggest an even larger effect during the resulting recessions. These results are robust across a wide range of digitalization measures—such as ICT input and employment shares, robot usage, online sales, intangible assets and digital skills listed on online profiles—and several alternative specifications.