Land Economy lecture: 'Does digitalisation increase firm survival? Evidence from British SMEs during the Covid-19 crisis'

Speaker: Sabine D'Costa (Westminster University)

Abstract: We investigate whether pre-pandemic adoption of digital technologies helped small and medium enterprises (SME) survive during the pandemic, and whether this effect differs between urban and rural areas. The pandemic increased the reliance on digital tools, and as personal contact was restricted, led to expectations of the decline of cities. We combine the Longitudinal Small Business Survey with the Business Structure Database to build a panel of British SMEs from 2015 to 2022. Survival models show that use of different digital technologies increased survival, but the effect is concentrated in urban areas. In urban areas, this effect is comparable in size to that of government Covid subsidies, while in rural areas subsidies are significantly more effective at reducing business exit. The results show that the benefits of digitalisation are not evenly spread among SMEs and policy responses to crises should take these urban-rural differences into account.

Speaker bio: Sabine is an urban economist at the University of Westminster, where she is a Senior Lecturer in Economics. Her research has focused on agglomeration economies, the urban wage premium, regional disparities in firm productivity and survival, regional growth and the labour market impacts of transport investments. She has previously worked at the London School of Economics and Queen Mary University of London and has consulted for the NGO and public sector. She is also an external member of the Centre for Globalisation research at Queen Mary University of London. She is currently an Associate Editor of Regional Studies, Regional Science.