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Building on prior work that documented the impact of COVID-19 on firms in developing countries using the first wave of Business Pulse Surveys, this paper presents a new set of stylized facts on firm recovery, covering 65,000 observations in 38 countries. This paper suggests that: One, since the outset of the pandemic, some aspects of business performance such as sales show signs of partial recovery. Two, other aspects remain challenging, including persistently high uncertainty and financial fragility. Three, recovery is heterogeneous across firms and more sensitive to firm-level attributes such as size, sector, and initial productivity than to country-level differences in the severity of the initial shock. In particular, larger and more productive firms are recovering faster, with implications for competition policy and allocative efficiency. Four, the decline in jobs has been steeper during the initial shock than the expansion in employment during recovery, raising the risk of a "jobless" recovery pattern. Five, the diffusion of digital technology and product innovation accelerated during the pandemic but did so unevenly, further widening gaps between small and large firms. Six, businesses now have more access to policy support, but poorer countries continue to lag behind and appropriate targeting of firms remains a challenge.

Business Cycles and Stabilization Policies --- Coronavirus --- COVID-19 --- Disease Control and Prevention --- Employment --- Firm Performance --- Health, Nutrition and Population --- Industrial Economics --- Industry --- Labor Markets --- Macroeconomics and Economic Growth --- Pandemic Impact --- Private Sector Economics --- Recovery --- Sales Revenue

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The advent of the novel coronavirus (COVID-19) pandemic has led to a severe liquidity crunch among private firms. Yet, formal analysis of the impact of a liquidity crunch or access to finance on the performance of firms during the pandemic is limited. The present paper estimates the impact of access to finance in the period before the pandemic on the likelihood of a decline in sales of the firm during the pandemic. The results show a strong connection between the two. That is, firms with better access to finance are significantly less likely to experience a decline in sales, and this relationship is highly heterogenous. First, better access to finance reduces the likelihood of a decline in sales much more for firms that have a stronger long-standing relationship with important stakeholders such as skilled workers and input suppliers. These are firms that use more skilled relative to unskilled workers, firms in industries with a more complex network of input suppliers, and firms in countries where the cost of enforcing contracts with new input suppliers is high. Second, the impact of access to finance is less among firms that use more women relative to men workers. This is especially so in countries or societies that accord a higher value to women's caregiving role than to their work outside the home. The paper argues that both of these heterogeneities are along expected lines and derive from the specific ways in which access to finance benefits firms in fighting the pandemic. Thus, they help to raise confidence against endogeneity concerns about the main results.

Access To Finance --- Business Cycles and Stabilization Policies --- Coronavirus --- COVID-19 --- Disease Control and Prevention --- Finance and Financial Sector Development --- Firm Performance --- Health, Nutrition and Population --- Liquidity Crunch --- Macroeconomics and Economic Growth --- Pandemic Response --- Private Sector Economics --- Sales Revenue --- Skills Development and Labor Force Training