Table 1: Firm Profits and Cost Composition Across Countries

||**Uganda**<br>**(UGA)**|**Ethiopia**<br>**(ETH)**|**Rwanda**<br>**(RWA)**|**Senegal**<br>**(SEN)**|**Eswatini**<br>**(ESW)**|**Guatemala**<br>**(GTM)**|**Albania**<br>**(ALB)**|**Ecuador**<br>**(ECU)**|**Montenegro**<br>**(MNE)**|**Costa Rica**<br>**(CRI)**|**Average**|
|---|---|---|---|---|---|---|---|---|---|---|---|
|**GDP Per Capita**<br>**(Current USD)**|643|772|773|1522|4146|4549|5269|6345|8846|12027|4489|
|**N Firms**|20194|11221|8321|5849|3791|25056|18785|56131|17655|80173|24718|
|**Avg. Simulated**<br>**Output Loss (%)**|51|38|50|49|50|52|39|51|56|59|50|
|**Avg. Simulated**<br>**Output Loss**<br>**(%, Weighted**<br>**by Turnover)**|48|47|42|42|41|51|34|46|49|56|46|
|**Firms Proftable**<br>**at Baseline (%)**|75|69|72|99|75|69|87|80|59|100*|79|
|**Avg. Proft Margin (%)**|10|12|4|5|16|7|12|8|8|14|10|
|**Avg. Material Cost**<br>**(% Total Costs)**|52|41|65|26|54|38|53|29|38|19|41|
|**Avg. Labor Cost**<br>**(% Total Costs)**|11|29|6|11|15|29|24|28|32|26|21|
|**Avg. Fixed Cost**<br>**(% Total Costs)**|34|31|28|63|31|32|22|42|30|55|37|

Note: This table presents summary statistics on firms in ten countries. All statistics are from administrative corporate tax records, except the first row which is from the World Development Indicators. The allocation of firms to the high, low and medium impact group is based on the sector of economic activity and follows the classification in Vavra (2020), as displayed in Table A.1. We assume that the high impact sector experiences a 100% output loss during lockdown, and the medium and low impact sectors experience a 50% and 20% output loss, respectively. This, together with the sectoral composition of the economy, generate the average output shock. The average across countries (last column) is a simple average, unweighted by population or the number of firms. Shares are rounded to the nearest integer. The share of firms in the high/medium/low impact category in each country is displayed in Table A.2. * Costa Rica does not allow loss carry forward, so only 100-200 firms per year report losses.

# **2.2 Modeling Assumptions**

We simulate the effect of the COVID-19-triggered lockdown as a revenue shock that lasts for either three or five months, i.e. roughly the duration of the lockdown. The size of the revenue loss during this period varies across sectors, as discussed above. In practice, the length and severity of lockdowns varies across countries. All countries in our sample had several months of lockdown or movement restrictions, and multiple countries have reimposed or strengthened restrictions over time. There is substantial uncertainty over the evolution of lockdown policies for the rest of 2020. Since our data are annual and do not reveal seasonality in sales across the year, our simulation of a three-month lockdown in the high (medium) impact sector simply corresponds to a 25% (17.5%) drop in firms’ annual sales. This way of modeling affords a lot of flexibility and does not have to correspond to the exact length of the lockdown. For instance, taking the high impact sector, the three-month lockdown scenario would be equivalent to a two-month full lockdown followed by a two-month partial (50%) lockdown. It also allows for imperfect compliance of firms to governmental restrictions and longer period of reduced but sustained activity.

7