Small Business Economic Structure — A Regional Resilience Factor in the Corona Crisis?

Abstract

Regional economic patterns affect the resiliency of geographic regions with regards to business cycle shocks. In particular, the literature has not sufficiently investigated the role of smaller companies. Do they serve as stabilisers or enhancers of business cycle fluctuations? Our results show that rural regions, as well as regions with a larger share of small companies — e. g. crafts companies — exhibit less severe labour market impacts as a result of the ongoing coronavirus crisis. Overall, our research points to the higher degree of resilience in regions with small scale firm structure.