International firms and COVID-19: evidence from a global survey

This paper explores how the international exposure of companies influenced their strategies in responding to the COVID-19 crisis, and the extent to which they were affected. Our conceptual framework formulates two hypotheses that can be empirically tested. First, we posit that international companies, due to their connections with domestic and foreign markets, are more vulnerable to the crisis, being affected through both demand and supply channels. Second, despite their heightened exposure, we anticipate that international companies will exhibit greater resilience during the crisis compared to their domestic counterparts. This resilience can be attributed to their enhanced global connectivity and productivity. The empirical analysis, based on a large firm-level survey undertaken in 2020 in 133 countries, documents how different types of firms were affected by COVID-19 crisis and how they reacted to the disruptions, providing empirical support for both hypotheses.