Does COVID-19 pandemic spur digital business transformation? Evidence from selected MENA countries

PurposeIn the light of high reliance on digital technology to mitigate the consequences of the coronavirus disease 2019 (COVID-19) pandemic and its containment measures, this study investigates the factors influencing firms' decision to adopt digital technologies during COVID-19 in four Middle East and Northern African (MENA) countries, namely, Egypt, Jordan, Morocco and Tunisia.Design/methodology/approachThe study used the International Labour Organization (ILO)/Economic Research Forum (ERF) COVID-19 - MENA Monitor Enterprise Survey (CMMENT), comprising 5,480 firms, surveyed during 2020-2021. The empirical model is estimated using the linear probability model (LPM) to address the problem of unobserved heterogeneity between firms, countries, and time.FindingsThe results revealed that firm characteristics, such as firm size and foreign ownership, encourage digital transformation in the business sector. Moreover, firms that face challenges during the pandemic, comply with the containment measures, and receive government assistance are more likely to adopt digital solutions. Furthermore, the results indicated that firms operating in services sector have a higher likelihood to adopt digital technology. Disaggregating the total sample into several sub-samples, the results are robust across countries and technology types, supporting the initial hypothesis that COVID-19 encourages digital transformation in the MENA region.Originality/valueThe study has numerous contributions. First, to the best of the authors' knowledge, this is the sole study that uses micro data collected during the COVID-19 to examine the factors influencing firms' decision to adopt and invest in digital solutions in the MENA countries. Second, the paper employs the LPM estimator to address the issue of unobserved heterogeneity between firms, countries and time. Finally, the paper offers some practical recommendations for accelerating digital transformation in MENA region.

Productivity and firm exit during the COVID-19 crisis: cross-country evidence

This paper examines whether the economic crisis induced by the COVID-19 pandemic exhibits a Schumpeterian "cleansing” of less productive firms. Using firm-level data collected for 34 economies up to 18 months into the crisis, the study finds that less productive firms have a higher probability of permanently closing during the crisis, suggesting that the process of cleansing out unproductive activities is occurring. The paper also uncovers strong and negative relationships of firm exit with digital presence and with innovation. These relationships are driven by small firms. The study further finds that a burdensome business environment increases the probability of firm exit, also driven by small firms, and that a negative relationship exists between firm exit and age. Finally, evidence shows that the cleansing process is disrupted in countries which have introduced policies imposing a moratorium on insolvency procedures.Plain English SummaryThe purpose of this analysis is to investigate whether firms that are more productive are less likely to cease operation during the economic crisis induced by the COVID-19 pandemic. To verify this hypothesis, the paper uses data on firm characteristics, productivity, and status of operation from 34 countries. The data on firm characteristics and productivity were collected before the crisis, while data on the operating status were collected within 18 months since the appearance of the coronavirus. The results of the paper show that indeed, more productive firms are more likely to survive the crisis. In addition, businesses that have been in operation for longer, or ones which have a website or have introduced a new product in the years before the crisis are more likely to continue existing. The positive role of digitalization and innovation is true especially for small firms. Conversely, those businesses which have to spend more time in compliance with government regulations are less likely to survive. The policy implications show the importance of digitalization and innovation, the vulnerabilities of small firms, and the significance of good governance.

Impact of government responses to COVID-19 on the resilience of FDI attractiveness factors in the Asian region

PurposeThe purpose of this paper is twofold. Firstly, the paper aims to determine the separate effects of the COVID-19 pandemic and government actions represented by the index of stringency, containment and economic support on the attractiveness of foreign direct investment (FDI). Secondly, the paper aims to explore the impact of the interactions between the COVID-19 epidemic and government interventions on FDI.Design/methodology/approachThe study uses a panel data set of 30 Asian countries during the two pandemic years 2020 and 2021 to investigate the effect of government actions on the resilience of FDI attractiveness factors.FindingsThe empirical results reveal the negative effect of COVID-19 on FDI inflows and attractiveness factors. However, government responses have a positive and statistically significant effect on the FDI attractiveness factors such as economic growth, trade openness and human and technological capital development and contribute to the economic recovery of the Asian region.Practical implicationsThe empirical findings can provide useful information for policymakers in designing macroeconomic policies and taking government measures to improve their investment environment and attract FDI.Originality/valueThe study shows that government responses, economic support, containment and health policies are effective in containing viruses, reducing the impact of the COVID-19 pandemic and strengthening resilience in FDI attractiveness factors. It also indicates that foreign investors are responding positively to government measures.

Interactive deciphering electron-shuttling characteristics of Coffea arabica leaves and potential bioenergy-steered anti-SARS-CoV-2 RdRp inhibitor via microbial fuel cells.

Due to the pandemics of COVID-19, herbal medicine has recently been explored for possible antiviral treatment and prevention via novel platform of microbial fuel cells. It was revealed that Coffea arabica leaves was very appropriate for anti-COVID-19 drug development. Antioxidant and anti-inflammatory tests exhibited the most promising activities for C. arabica ethanol extracts and drying approaches were implemented on the leaf samples prior to ethanol extraction. Ethanol extracts of C. arabica leaves were applied to bioenergy evaluation via DC-MFCs, clearly revealing that air-dried leaves (CA-A-EtOH) exhibited the highest bioenergy-stimulating capabilities (ca. 2.72 fold of power amplification to the blank). Furthermore, molecular docking analysis was implemented to decipher the potential of C. arabica leaves metabolites. Chlorogenic acid (-6.5 kcal/mol) owned the highest binding affinity with RdRp of SARS-CoV-2, showing a much lower average RMSF value than an apoprotein. This study suggested C. arabica leaves as an encouraging medicinal herb against SARS-CoV-2.

Intra-household exposure to labor market risk in the time of Covid-19: lessons from Mexico.

The ability to work from home can be critical during pandemics. We calculate an index that measures the possibility of working from home based on the characteristics of the pre-Covid-19 pandemic distribution of occupations and on internet access at home, using microdata for Mexico. Focusing on households with two partners employed in nonessential occupations, we show that there is high within-household correlation in the possibility of working remotely, which is likely to be positively associated with job stability during the pandemic. Poor families, with low access to formal credit and who rely heavily on informal mechanisms for consumption smoothing have lower chances of working remotely than richer families with higher access to formal credit. High within-household correlation in the work-from-home index restricts the likelihood of intra-household risk-sharing and consumption smoothing, and is likely to contribute to an increase in inequality.