Firm Responses To Covid-19 In India

This chapter explores the firm responses within various domains with the help of cross-sectional distributional analysis. The COVID-19 pandemic hit all the economies, and lockdown has been the dominant strategy across countries to contain the spread of the pandemic. Using micro-level data obtained from the Centre for Monitoring Indian Economy prowess IQ, the chapter examines firms’ responses to COVID-19 in various domains, particularly the changes in investment decisions and performance of firms operating in India. It reviews the relevant studies examining the dynamics of firm performance and resilience during the COVID-19 pandemic and provides the empirical observations. The changes in firm performance and firms’ investment responses to the pandemic provide significant policy implications. The chapter looks at staff training expenses by firms in India, a proxy to measure learning and interaction by employees. It also looks at multiple firm strategies, including investments in research and development activities and fixed assets, spending on distribution, staff training, and firms’ liquidity and borrowings.