COVID-19 and Food Firm Dynamics: Are Productive Agri-Food Firms More Resilient to the COVID-19 Pandemic?
Amid the COVID-19 outbreak, business owners encountered significant challenges because of widespread economic shutdowns mandated by restrictions and shifts in customer behaviour prompted by physical distancing measures. Specifically, businesses that were less productive or financially constrained prior to the pandemic were more susceptible to closure. Using microdata from Statistics Canada, I examine the effect of pre-COVID-19 pandemic productivity on firm closure during the pandemic. The findings of the study reveal that agri-food firms with lower pre-pandemic productivity were more inclined to cease their operations. Further analyses indicate that this effect vary across sectors, with generally stronger effects on food service and hospitality. Our findings have strong policy and welfare implications.