WHAT ARE THE IMPACTS OF COVID-19 ON SMALL BUSINESSES IN THE U.S.? EARLY EVIDENCE BASED ON THE LARGEST 50 MSAS

ABSTRACT

The novel coronavirus (covid-19) has caused an unprecedented impact on both the health and economic well-being of the United States. Small businesses have been particularly affected amid the outbreak of covid-19. Based on the first nine weeks of U.S. Small Business Pulse Survey data, this study examines the impacts of covid-19 on small businesses across the 50 most populous metropolitan areas in the United States with an individual growth model. The results demonstrate significant disparities in impacts across regions and over time. Although the death incidents directly impacted business operations, the social, economic, demographic vulnerability, and public policies were additionally critical to our understanding of these patterns. The findings directly contribute to scholarship on regional resilience under pandemic disruption from the perspective of small businesses. More specifically, our work sheds light on the relationship between regional socioeconomic vulnerability and small-business resilience. The results provide rich implications for practices and public policymaking.

Keywords::

• COVID-19
• small businesses
• resilience
• social vulnerability
• Small Business Pulse Survey

Notes

¹ It should be noted that as the COVID-19 cases continued to surge, some states have changed their reopen policies back and forth since the first lockdown in 2020.

² Currently the survey does not provide firm level data, but only aggregated data at the national, state, and the largest 50 MSA level. The survey design, questionnaire, data, and relevant documents can be obtained here .census.gov/data/experimental-data-products/small-business-pulse-survey.html

³ The HHI for MSA i is formally defined in the following Equation: $HH{I}_i=\sum _{s=1}^k(\frac{E_{si}}{E_i})$² where $E_{si}$ is the employment of industry s in MSA i, $E_i$ is the total employment in MSA i, and k is the number of North American Industry Classification System (NAICS) industrial sectors. We rely on the two-digit NAICS code system (k = 20) due to limited data availability.

⁴ The CDC provides the SVI data at the census tract and county level. Since our unit of analysis is MSA, we aggregate the county-level SVI data to the MSA level using the population-weighted average technique.

Additional information

Funding

This work was supported by the NSF [2029516].