Adapting to the new normal: The impact of remote work on firm performance in Jordan and Morocco

Abstract

AbstractBusinesses have been impacted particularly hard by the COVID‐19 pandemic, resulting in a decline in productivity. Whether a remote work policy boosts the firm’s productivity is still debatable. We use the COVID‐19 World Bank Enterprise Survey, a cross‐sectional dataset that covers Jordan and Morocco, to empirically examine this question. We use the propensity score matching technique to estimate the causal effect between remote work and firm performance. Results suggest the existence of a positive impact, suggesting that remote work policies cause an increase in productivity. In a further investigation, we perform our regression by country and firm size. Coefficients are found to remain positive in both countries but statistically significant only in Morocco. Regarding firm size, coefficients are found to be positive and statistically significant across all models. The paper offers some recommendations for policymakers in both countries to mitigate the ongoing crisis on firm performance.