Work-from-home and Firms’ Resilience: Evidence from the COVID-19 pandemic

Using unique administrative data on the adoption of work-from-home (WFH) by Italian firms, we study the impact of WFH on firms' responses to the COVID-19 shock. Employing a difference-in-differences framework and an instrumental variable approach, we examine firms' performance before and after the onset of the COVID-19 pandemic, comparing those that adopted WFH practices during the 2020 lockdowns to those that did not. We find that the adoption of remote work during the outbreak had a mixed impact on firms, with smaller firms experiencing negative revenue growth. However, firms that had invested more in information and communication technologies before the pandemic began were able to mitigate this negative effect.