# **1. Introduction**

The COVID-19 pandemic has taken a profound toll on businesses across the globe. The dual shock of the coronavirus pandemic and government mandated economic shutdowns to contain the spread of the virus plunged the world economy into a deep recession in 2020 (Long and Ascent, 2020). All around the world, firms had to cope with a broad range of concurrent challenges, including suspensions of their in-person operations, mobility restrictions, a remote workforce, supply chain disruptions, and falling consumer demand.

While the impacts of the COVID-19 crisis are felt across the world, there is also evidence of considerable heterogeneity in the severity of firm-level impacts, both across and within countries (Apedo-Amah et al., 2020). This paper focuses on one possible source of heterogeneity in the impact of COVID-19 on businesses– differences between firms led by men and firms led by women.

A focus on gender differences seems warranted given the extensive (pre-COVID-19) literature establishing gender as an important determinant of business performance, with female-owned or -managed firms typically registering lower levels of labor and total factor productivity than male-owned or managed firms (Aterido et al., 2011; Bardasi et al., 2011; Rijkers and Costa, 2012; Hallward-Driemeier, 2013; Bruhn and McKenzie, 2014; Alibhai et al., 2015; Campos et al., 2018; Gui-Diby et al., 2017; Munyegera and Precious, 2018; Islam et al., 2020). Moreover, a few recent studies suggest that the COVID-19 crisis has had a disproportionate impact on female entrepreneurs (ANDE, 2020b; Facebook et al., 2020; ANDE, 2020a; Chawla et al., 2020; Jaim, 2021). Most of these studies, however, are either based on relatively small samples or a sampling approach that is not explicitly designed to be representative of a target population (Schneider, 2020). Therefore, caution must be exercised in generalizing the results from these case studies.

This paper provides novel insights into gender differences in the impacts of the COVID-19 crisis on firms, drawing on a unique data set of around 40,000 mainly formal businesses (only five countries included informal firms in the sample). Our analysis exploits firm surveys conducted between April and September 2020 under the World Bank’s Business Pulse Survey (BPS) and Enterprise Survey (WBES) programs. These data cover businesses across 49 mostly low- and middle-income countries. This database has been analyzed by ApedoAmah et al. (2020) to document global firm-level impacts of COVID-19, but without any disaggregation by gender. We extend their analysis to shine a spotlight on the early impacts of the COVID-19 crisis on womenand men-led businesses. We capture three broad areas of interest. First, impacts of COVID-19 on business performance measures (i.e. temporary business closures, disruptions in supply channels, changes in sales revenues, financial risks and the owners’ expectations about the future); second, responses to the crisis (i.e. adjustments in labor inputs, technology adoption and product innovation); and third, access to public support.

Our paper offers descriptive evidence of a differentiated effect of the pandemic on women-led businesses using robust and timely data that are comparable across countries and that cover critical dimensions of the operations of a firm. In a crisis of the magnitude of the COVID-19 pandemic, evidence tracing the impact of the shock in a timely fashion is desperately needed to help inform the design of policy interventions. Our real-time glimpse into women-led businesses fills this need for timely and policy-relevant evidence, even if the data are not well suited to examine the underlying channels potentially explaining the patterns we document (channels which likely vary across countries).

Our analysis shows statistically significant gender gaps in different measures of performance, which suggests that women-led firms were disproportionately hit compared to businesses led by men. Specifically, we find that women-led micro-businesses, women-led businesses in the hospitality industry (hotels and 2