Dear colleagues, in the name of the Department of Economics, I cordially invite you to our research seminar 19th of May, 2021, 4pm Antoinette Schoar (MIT Sloan School of Management) https://mitmgmtfaculty.mit.edu/aschoar <https://mitmgmtfaculty.mit.edu/aschoar> Revenue collapses and the consumption of small business owners in the early stages of the Covid-19 Pandemic https://www.nber.org/papers/w28151 <https://www.nber.org/papers/w28151> Abstract: Using detailed transaction-level data from financial accounts, this paper shows that the revenues of small businesses and the consumption spending of their owners both decline by roughly 40% following the declaration of the national emergency in March 2020. However, through May 2020, the vast majority of this average decline in revenues is due to national factors rather than to variation in local infection rates or policies. Further, there is only a modest propensity for business owners to cut consumption in response to their individual business losses: Comparing owners in the same county but whose businesses operate in industries differentially impacted by local infections and state-level policies, we show that each dollar of revenue loss leads to a 1.6 cent decline in the consumption of the owner at this early stage of the pandemic. This limited passthrough appears to be explained by three factors: (1) the liquidity of households and businesses entering the crisis – consumption is twice as responsive for small business owners who operate with low liquidity; (2) emergency Federal programs – median account balances in both business and checking accounts decline in March but rebound in April and May when the transfer programs begin; (3) pandemic induced declines in the ability to spend on consumption – spending on travel, restaurants or personal services dropped dramatically. Antoinette Schoar is the Stewart C. Myers-Horn Family Professor of Finance and Entrepreneurship at the MIT Sloan School of Management. She holds a PhD in Economics from the University of Chicago and an undergraduate degree from the University of Cologne, Germany. She is the co-chair of the NBER Corporate Finance group. Antoinette's research interests span from entrepreneurship and financing of small businesses in emerging markets to household finance and intermediation in retail financial markets. She received several awards, including the Brattle Prize for best paper in the Journal of finance and the Kauffman Prize Medal for Distinguished Research in Entrepreneurship in 2009. She has published numerous papers in the Journal of Finance, Journal of Financial Economic, the Quarterly Journal of Economics and others. Her work has been featured in the Economist, the Financial Times, the New York Times, and the Wall Street Journal. Antoinette is also the cofounder of ideas42, http://www.ideas42.org <http://www.ideas42.org/>, a non-profit organization that uses insights from behavioral economics and psychology to solve social problems. Selected publications: * “Can Unemployment Insurance Spur Entrepreneurial Activity? Evidence from France” with J. Hombert, D. Sraer, and D. Thesmar, The Journal of Finance, 75, June 2020, 1246-1285. * "Trading and Arbitrage in Cryptocurrency Markets," with I. Makarov, Journal of Financial Economics, (135)2, February 2020, 293-319 . * "The Globalization of Angel Investments: Evidence Across Countries." with J. Lerner, S. Sokolinski, and K. Wilson, Journal of Financial Economics, 126(2), April 2018, 1-20. * "Does the Market Value CEO Styles?" with L. Zuo, American Economic Review, 106(5), May 2016, 262-66. * "The Role of Family in Family Firms," with M. Bertrand, Journal of Economic Perspectives, 20(2), Spring 2006, 73-96. * “Does Legal Enforcement Affect Financial Transactions? The Contractual Channel in Private Equity,” with J. Lerner, The Quarterly Journal of Economics, 120(1), February 2005, 223-246 Please register at https://www.jku.at/en/department-of-economics/research/research-events/onlin... <https://www.jku.at/en/department-of-economics/research/research-events/online-research-seminar/> for the zoom link. With best regards, René Böheim -- PD René Böheim, PhD Department of Economics JOHANNES KEPLER UNIVERSITÄT LINZ Altenberger Straße 69 4040 Linz, Österreich P +43-732-2468-7369 www.econ.jku.at/boeheim <http://www.econ.jku.at/boeheim> Research: http://ideas.repec.org/e/pbh15.html <http://ideas.repec.org/e/pbh15.html>