demic’s impact in real time, including text data from earnings reports (Hassan et al., 2020), unemployment claims, and transaction data from credit or debit card purchases (Chetty et al., 2020). This diverse evidence all points towards a severe and immediate impact of the shock on firm revenue and employment. Existing evidence also suggests that the pandemic affected countries with different degrees of lockdown severity alike. Extrapolating estimates from the Republic of Korea, where no lockdown was implemented, Aum et al. (2020) hint at fear of infections rather than lockdown as the main driver of the drop in local employment, and suggests the pandemic has truck high-contact industries the hardest.

As the pandemic unfolds over time, more direct evidence, particularly using surveys, is emerging about its impact on jobs and business activities at different stages of the pandemic. In the short term, severe impacts have been documented across countries in terms of revenue loss, business closures, mass layoffs, and liquidity (see Dai et al. (2020b) for evidence in China and Bartik et al. (2020); Humphries et al. (2020a); Adams-Prassl et al. (2020); Fairlie (2020a,b) for evidence in the United Kingdom, United States and Germany). Firms are hit by multiple channels, with depressed demand being the most frequently reported concern in recent firm surveys and becoming more prominent over time (Dai et al., 2020a; Balleer et al., 2020). Acharya and Steffen (2020) find a sharp increase in US companies’ cash holdings in March, as COVID-19 fears started to materialize. They attributed this increase in cash to a concern among managers that their firm’s credit rating would be downgraded on account of pandemic-related business disruption, and that it would become more expensive or even impossible to raise cash after that. With falling revenue, most SMEs are now in major financial distress (Bartik et al., 2020; Zhang, 2020).

While there is much uncertainty about the longer term impact of the pandemic, evidence from past crises points to potential scarring effects in the long run. Reallocation effects of the COVID-19 shock are likely to persist long after the pandemic recedes (Barrero et al., 2020). All firms are vulnerable to persistently low demand, but in large systemic crises good and bad firms may be weeded out alike (Hallward-Driemeier and Rijkers, 2013; Foster et al., 2016). More recent estimates from Bosio et al. (2020) using Enterprise Survey data suggest that in multiple shock scenarios, firms suffer liquidity shortages regardless of age, size and productivity levels. Uncertainty can further deter economic activities. Balla-Elliott et al. (2020) find that post-lockdown delays in business reopening in the United States can be explained by low levels of expected demand rather than by health concerns. During past crises, firms were less likely to undertake radical innovation and disproportionately cut back on intangible investment Granja and Moreira (2019); Duval et al. (2020). There has been an unprecedented level of uncertainty documented during this pandemic and firms have been found to respond by significantly cutting expenditures on innovation and general management improvements, which will likely affect future productivity growth (Baker et al., 2020).

Despite this quickly expanding literature, there has been no systematic cross-country evidence about the impact of the pandemic on firms. Some cross-country evidence exists but only focuses on small and relatively selected samples of firms. For example, using survey responses from early April across nearly 500 listed firms in 10 emerging markets, Beck et al. (2020) find that the vast majority of firms have been negatively affected by COVID-19 and reacted by reducing investment rather than payrolls. Surveys of businesses on e-commerce platforms have similarly found widespread 3