Renegotiations at Firm levels Comprehending effects of Covid-19

Research Brief

Economic Research Group (ERG)
June, 2020

The SARS-CoV2 pandemic, leading to deadly Covid-19, brought disruptions in inter-country as well as within-country flow of goods and services. ERG carried out a phone-based survey of 102 firms engaged in manufacturing and service sectors to assess, (i) extent of initial ‘shock’ faced, and (ii) coping strategies that involve renegotiations in work practices, rental contract of premises and in contracts with employees. In addition, initial responses following the government declaration of the stimulus package were also looked into. The firms were drawn from a 2018 sample of 298 enterprises, and information were sought through administering a structured questionnaire over phone, during 10th-23rd of May 2020.

Almost 86% of surveyed firms had their head offices in Dhaka and a majority of the rest were from Chittagong. While 70% were locally owned, 20% were JV and 10% were fully foreign owned. The 2018 survey revealed that 22% of the current sample were fully export-oriented and another 9% exported in various degrees. The earlier survey also revealed that 37% were micro and small enterprises (mSE) in terms of employment size.

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