Coping with Covid-19: Does Management Make Firms More Resilient?
Abstract: The spread of COVID-19 has disrupted firm operations on a global scale. Using a comprehensive data set that observes over 3,000 firms in several developing countries shortly before and after the pandemic, we relate firms' structured management practices to post-COIVD outcomes, and report four main findings. First, structured management practices are associated with more limited downside impacts of crisis on firm sales and firm closures in manufacturing but not in services. Better managed manufacturing fims, on average, experience a smaller reduction in sales. Second, in both manufacturing and services, structured management practices are correlated with a firm's ability to adjust or convert product mix and shift to online work arrangements. Third, management practices are not correlated with a firm's ability to adjust on employment margins. Fourth, the resilience of better managed firms is related primarily to incentive practices, and is uncorrelated with operations or targeting practices. Monitoring practices show a modest correlation with a firm's ability to switch to remote work arrangements.
