REWRITING THE FUTURE OF BUSINESS BY SUSTAINABLE BUSINESS DECISIONS-LESSONS FROM COVID-19 (THEORETICAL STUDY)

Abstract

Since the COVID-19 pandemic began, one concern has been that lockdowns might be especially damaging in the poorest countries – in these places lockdowns may reduce the spread of coronavirus, but only by simultaneously leaving poor families without cash to spend, and without food to eat. In this paper, we shed light on a particular aspect of this concern: can food supply chains themselves remain functional in the face of a national lockdown, and a growing burden of coronavirus cases? We address this question by documenting the breakdown and subsequent recovery of India’s food supply chain during the first three months of India’s national lockdown.

On March 24, 2020, India announced a strict lockdown for 21 days in response to a surge in COVID19 cases. According to the World Bank, India’s lockdown was the largest implemented by any country. The lockdown was extended in three additional phases of 14 days each, with each phase accompanied by relaxations in lockdown rules. Following these three additional phases, the central government announced a staggered lifting of the lockdown. Using web-scraped daily data on wholesale volumes and prices for 271 food varieties traded at 1804 agricultural markets in 24 states of India, we document trends in the supply and prices of food during these phases. Specifically, we estimate the size of the initial shock to food supply and wholesale prices following the lockdown announcement, the extent of the recovery, and the correlation of the shock and the recovery with the spread of the virus. Our work also connects to the more general global debate on how companies do business on post covid-19, whether economic responses to COVID19 are more policy-driven or more related to individual assessments of risk. This debate informs central questions: does lifting a lockdown cause economic activity to increase? Or will people stay at home regardless of the official lockdown policy in the hope of mitigating personal and social risks.

This paper is organized as how the coronavirus pandemic is likely to change how companies do business.