Research

SMEs Amidst the Pandemic and Reopening: Digital Edge and Transformation, with Lin William Cong and Xiaobo Zhang
Forthcoming at Management Science
Abstract: Using administrative universal business registration data as well as primary offline and online surveys of small businesses (including unregistered self-employments) in China, we examine (i) whether digitization helps small and medium enterprises (SMEs) better cope with the COVID-19 pandemic, and (ii) whether the pandemic has spurred digital technology adoption. We document significant economic benefits of digitization in increasing SMEs' resilience against such a large shock, as seen through mitigated demand decline, sustainable cash flow, ability to quickly reopen, and positive outlook for growth. Post the January 2020 lockdown, firm entries exhibited a V-shaped pattern, with entries of e-commerce firms experiencing a less pronounced immediate drop and a quicker rebound. Moreover, the pandemic has accelerated the digital transformation of existing firms and the industry in multiple dimensions (e.g., altering operation scope to include e-commerce, allowing remote work, and adopting electronic information systems). The effect persists more than one year after reopening, and is more pronounced for certain sectors, firms in industrial clusters, and areas with more digital inclusion but less financial efficiency, constituting initial evidence for the long-term impact of the pandemic and the supposedly transitory mitigation policies.
Media report: https://mp.weixin.qq.com/s/wPdYo1YjiUkrpRiunz5pmg

One Year after COVID: the Challenges and Outlook of Chinese Micro-and-small Enterprises, with Tao Kong et al. (2022)
China Economic Journal, Volume 15, Issue 1, pp. 1-28.
Abstract: Based on a large Online Survey of Micro-and-small Enterprises (OSOME) conducted in March 2021 on micro-and-small enterprises and self-employed businesses (MSEs) operating on the Alipay platform, this paper examines the operational status, challenges, responses, and confidence of MSEs after exposure to the COVID-19 pandemic for over a year in China. The operational status of micro-and-small enterprises has significantly improved despite cash flow constraints. Rising costs and weak demand were two key challenges. In response to the COVID-19 shock, a higher percentage of newly established businesses adopted online sales and electronic information systems than those established earlier. Tax reduction was the most inclusive type of policy support. The confidence indices on market demand, production, and revenues for the next quarter returned to positive territory, indicating an optimistic outlook. The employment index remained just below the normal level, suggesting subdued expectations of expanded employment in the near future.
* Peak Initiative of Digital Finance Open Research Best Paper Award (2021-2022)
Media report: https://mp.weixin.qq.com/s/XvhSfyXiV3INjXFi2tN-FA
https://mp.weixin.qq.com/s/ER9wL4CKO7HBh7GczF-cOw

“Bridging the Gender Gap in Entrepreneurship and Empowering Women via Digital Technologies” with Lin William Cong, Jacopo Ponticelli, and Xiaobo Zhang (2022), Working Paper.

“Digital Platforms and the Real Economy: Entrepreneurship, Development, and Industry Clustering” with Lin William Cong, Bo Liu, and Xiaobo Zhang (2022), Working Paper.

“Multinationals Work Experience and Innovation: Evidence from China” (2019), Working Paper (in Chinese).

Enterprise Survey

Quality and Industrial Upgrade

Entry Deregulation on Digital Platform