# **3. Data and Methodology**

## **3.1 Data**

To understand the impact of the COVID-19 pandemic on the performance of firms across countries, the World Bank Group, through its Business Pulse Surveys (BPS) and the Enterprise Surveys (WBES), developed an instrument to survey firms. These surveys include modules on firm characteristics (e.g., size, age, gender of the owner, debt, pre-COVID-19 sales etc.), changes since the onset of COVID-19 in employment, sales, expectations, digitalization, and public support received.<sup>6</sup> The first wave of BPS surveyed firms between May and September 2020 in 51 countries, and a follow-up wave 2 survey was implemented between October 2020 and March 2021 in 38 countries. This second round of data collection allows us to observe the evolution of business responses over time. This paper focuses on the 38 countries where both the first and the second waves of surveys have been conducted. In total, we observed 34,620 firms in wave 1; and 30,404 in wave 2, where 24,973 correspond to panel firms. Our sample comprises primarily of countries in the low and middle-income group (See Appendix B for disaggregate observations for each country included in the sample).

Firms in all sectors and size groups are surveyed. Our sample includes firms in agriculture (3.6%), manufacturing (31.6%), retail (23.2%) and other service activities (41.6%). All size groups are included in the sample: micro (firms with 0-4 employees; 33.6%), small (5-19 employees; 31.9%), medium (20-99 employees; 21.5%) and large (over 100 employees; 13.0%). For most countries, the sampling frame was based on censuses from Statistics Agencies, Ministries of Finance or Economy, or business listings from Business Associations, and typically only included businesses that could be found in some registers or listings. The WBES COVID-19 follow up surveys, by design, cover only formal firms.

We also use data from Google mobility reports around transit stations (Google, 2021) to measure the size of the shock suffered by firms. For countries without available data, we impute data based on the Oxford Government Response Tracker index (Hale et al., 2021). We construct an indicator of the severity of the crisis that is a weighted average of 30-day periods since the start of the pandemic until the date of the survey. Specifically, the 30-day period average just before the survey has a weight of 1, the average from day 31-60 has a weight of 1/2, the average from day 61 to 90 has a weight of 1/3, and so on until the start of the pandemic.

## **3.2 Methodology**

## _Estimation Issues_

To use the harmonized BPS and WBES follow-up data for assessing the impact of COVID-19 on firm performance and recovery, we face two methodological challenges. _First_ , there is heterogeneity related to the differences in country samples, implementation strategy, and the timing of the surveys, also noted in Apedo-Amah et al. (2020). _Second_ , although wave 2 specifically targeted followup surveys of firms from wave 1, some firms were not reachable or declined participation. The

> 6For the BPS wave 1 questionnaire, see Apedo-Amah et al. (2020); for wave 2, see Appendix D. For WBES see http://www.enterprisesurveys.org.

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