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Volume 4, Issue 7 – July – December – 2020
RINOE®
Journal-Macroeconomics
and Monetary economy
ISSN-On line: IN PROCESS
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Presentation of Content
As a first article we present, Impact of COVID-19 on the economy of micro, small and medium
enterprises in Mexico, by SERRANO-TORRES, Ma. Guadalupe, ZAMBRANO-BALDIVIEZO, Oscar
Javier, QUEZADA-FLORES Ma. de la Luz and MÁRQUEZ-DE ANDA Camilo, with adscription at
Universidad Tecnológica de León, Guanajuato and the Corporación Universitaria Minuto de DIOS-
UNIMINUTO, Santander Colombia, in the next article we present, Economic repercussions of COVID-
19 on micro and small enterprises: A case study in Atlacomulco, Mexico, by CARRILLO-ÁNGELES,
Rebeca Yurani, ALCÁNTARA-MANCILLA, Marycarmen and CRUZ-SORIANO, Emmanuel, with
adscription at Universidad Politécnica de Atlacomulco and Universidad Autónoma del Estado de
México, in the next article we present, Solutions and strategies of Nezahualcoyotl´s business before the
pandemic, by GUTIÉRREZ-ZEPEDA, Martha del Pilar, with adscription at Universidad Tecnológica de
Nezahualcóyotl, in the next article we present, Covid-19, economic activity and formal employment. A
look at the effects of the pandemic in México and Nayarit, 2020, by MENDOZA-ALVARADO, Juan
José, ROBLES-ZEPEDA, Francisco Javier and SÁNCHEZ-GÓMEZ, Sara Alejandra, with adscription
at Universidad Autónoma de Nayarit.
Content
Article
Page
Impact of COVID-19 on the economy of micro, small and medium enterprises in Mexico
SERRANO-TORRES, Ma. Guadalupe, ZAMBRANO-BALDIVIEZO, Oscar Javier,
QUEZADA-FLORES Ma. de la Luz and MÁRQUEZ-DE ANDA Camilo
Universidad Tecnológica de León, Guanajuato
Corporación Universitaria Minuto de DIOS- UNIMINUTO, Santander Colombia
1-6
Economic repercussions of COVID-19 on micro and small enterprises: A case study in
Atlacomulco, Mexico
CARRILLO-ÁNGELES, Rebeca Yurani, ALCÁNTARA-MANCILLA, Marycarmen and
CRUZ-SORIANO, Emmanuel
Universidad Politécnica de Atlacomulco
Universidad Autónoma del Estado de México
7-15
Solutions and strategies of Nezahualcoyotl´s business before the pandemic
GUTIÉRREZ-ZEPEDA, Martha del Pilar
Universidad Tecnológica de Nezahualcóyotl
16-27
Covid-19, economic activity and formal employment. A look at the effects of the
pandemic in México and Nayarit, 2020
MENDOZA-ALVARADO, Juan José, ROBLES-ZEPEDA, Francisco Javier and
SÁNCHEZ-GÓMEZ, Sara Alejandra
Universidad Autónoma de Nayarit
28-42
1
Article Journal-Macroeconomics and Monetary Economy December, 2020 Vol.4 No.7 1-6
Impact of COVID-19 on the economy of micro, small and medium enterprises in
Mexico
Impacto del COVID-19 en la economía de las micro, pequeñas y medianas empresas
de México
SERRANO-TORRES, Ma. Guadalupe†*, ZAMBRANO-BALDIVIEZO, Oscar Javier, QUEZADA-
FLORES Ma. de la Luz and MÁRQUEZ-DE ANDA Camilo
Universidad Tecnológica de León, Guanajuato
Corporación Universitaria Minuto de DIOS- UNIMINUTO, Santander Colombia.
ID 1st Author: Ma. Guadalupe, Serrano-Torres / ORC ID: 0000-0003-2229-6925, CVU CONACYT ID: 679788
ID 1st Coauthor: Oscar Javier, Zambrano-Valdivieso / ORC ID: 0000-0003-0064-1062
ID 2nd Coauthor: Ma. de la Luz, Quezada-Flores / ORC ID: 0000-0002-4726-2695, CVU CONACYT ID: 801109
ID 3rd Coauthor: Camilo, Márquez-De Anda / ORC ID: 0000-0002-6800-0811
DOI: 10.35429/JMME.2020.7.4.1.6 Received July 27, 2020; Accepted December 14, 2020
Abstract
The objective of this research is to analyze the effects of
COVID-19 on the economy and finances of micro, small and
medium enterprises (MIPYMES) in Mexico, as well as the
economic and financial strategies to survive this perfect
storm, where the characteristic The main thing about this type
of business is that it survives and is used to these events due
to the way in which they are generally created and because
they have a peculiar characteristic that the vast majority are
family businesses. A mixed methodology is used that starts
from grounded theory, is contrasted with findings from other
national and international research that show the importance
of analyzing the economic and financial effects for MSMEs.
For the quantitative analysis, statistics of the companies that
closed since the beginning of the pandemic were analyzed
according to data collected by the INEGI Statistics Institute
in 2020. As a result, it is obtained that the MIPYMES made
use of their savings and previous returns, a change in the way
of marketing their products, using online and home sales.
This as economic and financial survival strategies in the red
light months in each of the states of the Mexican Republic,
and that affected all companies in the world.
Economic impact, Micro, small and Medium enterprises
Resumen
La presente investigación tiene por objetivo analizar los
efectos del COVID-19 en la economía y finanzas de las
empresas micro, pequeñas y medianas empresas (MIPYMES)
de México, así como las estrategias económicas y financieras
para sobrevivir ante esta tormenta perfecta, donde la
característica principal de este tipo de empresas es que
sobreviven y están acostumbradas a estos acontecimientos
por la manera como generalmente son creadas y por tener una
peculiar característica que son la gran mayoría empresas
familiares. Se utiliza una metodología mixta que parte de la
teoría fundamentada, se contrasta con hallazgos de otras
investigaciones nacionales e internacionales que evidencian
la importancia de analizar los efectos económicos y
financieros para las MIPYMES. Para el análisis cuantitativo
se analizaron estadísticas de las empresas que cerraron desde
el inicio de la pandemia según datos recabados por el Instituto
de Estadística INEGI al año 2020. Como resultado se obtiene
que las MIPYMES hicieron uso de sus ahorros y
rendimientos anteriores, cambio en la forma de comercializar
sus productos, utilizando ventas por internet y a domicilio.
Esto como estrategias económicas y financieras de
sobrevivencia en los meses de semáforo rojo en cada uno de
los estados de la república Mexicana, y que afecto a todas las
empresas del mundo.
Impacto económico, Micro, Pequeñas y Medianas
empresas
Citation: SERRANO-TORRES, Ma. Guadalupe, ZAMBRANO-BALDIVIEZO, Oscar Javier, QUEZADA-FLORES Ma. de
la Luz and MÁRQUEZ-DE ANDA Camilo. Impact of COVID-19 on the economy of micro, small and medium enterprises
in Mexico. RINOE Journal-Macroeconomics and monetary economy. 2020. 4-7: 1-6
* Correspondence to Author (e-mail: gserrano@utleon.edu.mx)
† Researcher contributing first author.
© RINOE Journal – Taiwan www.rinoe.org/taiwan
2
Article Journal-Macroeconomics and Monetary Economy December, 2020 Vol.4 No.7 1-6
SERRANO-TORRES, Ma. Guadalupe, ZAMBRANO-BALDIVIEZO,
Oscar Javier, QUEZADA-FLORES Ma. de la Luz and MÁRQUEZ-DE ANDA Camilo. Impact of COVID-19 on the economy of micro, small
and medium enterprises in Mexico. RINOE Journal-Macroeconomics
and monetary economy. 2020
ISSN-On line: 2524-2040
RINOE® All rights reserved.
1. Introduction
Currently, a COVID-19 pandemic is being
experienced that affects companies around the
world in a health and economic way, putting
their operation at risk. When the global isolation
took place and in Mexico in the month of March,
many people were fired from their jobs, virtual
jobs and classes were carried out, leading
companies to close temporarily and as progress
was made and from the way of measuring the
difficulty Of this pandemic, which were the
traffic lights, only companies of first necessity
were allowed to remain open to the general
public. Hence the importance of analyzing the
impact on the economy and finances of Mexican
MSMEs and the strategies used by the
companies that survived the first red light and
the closure of non-essential companies.
1.1 Justification
Thus, the present research is charged with
making known the economic and financial
strategies used by the MIPYMES of Mexico to
use as tools and survive in the face of this critical
situation for the companies in question. This
article presents the economic and financial
strategies of micro and small companies and
what they used during this pandemic. Their high
business representation in Mexico with more
than 95%, accustomed to high tides and
economic turbulence and to survive due to their
own characteristics that distinguish them from
being mostly family businesses, where their
main objective is a family and private purpose
and that They use as a strategy the reinvestment
of profits without withdrawing and thus grow
their business in an incalculable way, there is the
counterpart that statistics show us that only one
in three companies survives for more than three
years.
1.2 Problem
The current economic crisis derived from this
pandemic has caused companies that want to
stay alive to choose to have financial and
economic strategies that allow them to survive
during this global crisis.
1.3 General research question
How many companies were economically and
financially affected by the covid-19 pandemic in
Mexico.
1.4 Hypothesis
Micro and small businesses in Mexico do not
have the necessary competitiveness strategies to
survive during this COVID -2019 pandemic.
1.5 General purpose
Analyze the economic and financial impact of
MSMEs in Mexico.
2. Theoretical framework
2.1 Current situation
To get into the topic of MSMEs, we begin by
understanding how business representation is in
Mexico, According to the timely results of the
2019 economic censuses of the INEGI in our
country, the following data is available. INEGI
(2020).
In Mexico there are 4,773,995
companies, of which 95% are micro companies,
4% small companies, .80% medium companies,
0.02% large companies, so 99.80% are our
companies based on this research. The following
graph shows the business representation to the
year 2020.
Figure 1 Business representation in Mexico, with data
from INEGI, 2020
Own Elaboration
With data from the same INEGI, the
generation of jobs of this type of companies is
shown. In these 4,773,995 companies,
26'561,457 people worked: 37.8% worked in
micro-businesses, 14.7% in small businesses,
15.9% in medium-sized companies and 31.6% in
large economic units. The data is shown below
in the following graphic.
95%, 4'535,295
4%, 190,959.80
0.80%, 38,191.96
0.02%, 954.80
Business Representation in Mexico
Micro-businesses
Small companies
Medium businesses
Big enterprises
3
Article Journal-Macroeconomics and Monetary Economy December, 2020 Vol.4 No.7 1-6
SERRANO-TORRES, Ma. Guadalupe, ZAMBRANO-BALDIVIEZO,
Oscar Javier, QUEZADA-FLORES Ma. de la Luz and MÁRQUEZ-DE ANDA Camilo. Impact of COVID-19 on the economy of micro, small
and medium enterprises in Mexico. RINOE Journal-Macroeconomics
and monetary economy. 2020
ISSN-On line: 2524-2040
RINOE® All rights reserved.
Figure 2 Employed personnel by company size. With data
from INEGI
Own Elaboration
Now, to continue with our analysis of
MSMEs, the contribution in income of this type
of business is shown as the business backbone in
our country. Because they represent 52% of the
total income of the country's companies and
large companies contribute 48% of the income,
as shown in the following graphic.
Figure 3 Income generation by company size. With data
from INEGI
Own Elaboration
The following table shows the criteria
that INEGI considers for the classification of
companies by size, specifying that this
classification is made based on the number of
workers within the company.
Company size Number of employed workers
Micro enterprises 0 to 10 busy people
Small companies 11-50 busy people
Medium businesses 51-250 busy people
Big enterprises From 250- onwards
Table 1 Classification of companies by number of
employed personnel. With data from INEGI, of own
elaboration
2.1. Economic impact
In research carried out by Maravato (2020), by
June of this year 77% would have financial
problems or at least opened their doors
temporarily closed due to the red traffic light in
each of the states, this assumption was carried
out in many establishments and the numbers The
exact details of the definitive business closures
are not exactly known due to the fact that there
are businesses that are taxed informally and
there are no records of them.
2.2 COVID-19 measurement
The World Health Organization, WHO (2020),
updates daily the impact of the COVID-19
disease, this to take the necessary measures to
face the pandemic, it is here where decisions are
made according to the number of infections and
deaths from This disease has a direct impact on
companies, whether to continue operating or
temporarily close their doors, to reduce the risk
of contagion and reduce the spread of the
disease.
2.3 Birth of COVID-19 and its economic
impact
For Proum (2020), Mexican SMEs are in great
economic distress, this putting as a precedent
that the virus was born in the province of Wuhan,
China and without losing sight of the bilateral
relationship that exists between both countries,
because that country It is the second country in
imports and the fourth in exports, during 2019,
China and Mexico made trade agreements,
which resulted in an economic spill of more than
7 billion dollars economic risk, due to this
antecedent it is not difficult to anticipate that it
will exist an economic impact on our country
and that directly affects our companies under
study. For Blancas (2020), a very important
problem during this pandemic is the main
characteristic of MSMEs, most of the micro
companies pay taxes in informal trade and this
affects the economy of the country, being
affected by the closure, for this the federal
government implemented support and loan
plans. JJ. As of December 31, Mexico closed the
year with 125,807 deaths and 1 million 426,094
cases, this is discouraging for companies that are
in danger of closing at least temporarily
according to the traffic lights of each of the states
of the Mexican Republic.
38%,
10'045,543
15%,
3'904,534
15.90%,
4'223,272
31.60%,
8'393,420
Employed personnel by company size
Micro-businesses
Small companies
Medium businesses
Big enterprises
14%
16%
22%
48%
Total income generated
Micro-businesses
Small companies
Medium businesses
Big enterprises
4
Article Journal-Macroeconomics and Monetary Economy December, 2020 Vol.4 No.7 1-6
SERRANO-TORRES, Ma. Guadalupe, ZAMBRANO-BALDIVIEZO,
Oscar Javier, QUEZADA-FLORES Ma. de la Luz and MÁRQUEZ-DE ANDA Camilo. Impact of COVID-19 on the economy of micro, small
and medium enterprises in Mexico. RINOE Journal-Macroeconomics
and monetary economy. 2020
ISSN-On line: 2524-2040
RINOE® All rights reserved.
3. Methodology to be developed
This research uses a mixed methodology, first of
all based on grounded theory, it is contrasted
with findings from other investigations with a
systematic review of the literature to form the
theoretical framework that responds to the
objective of this research, supported by the
question of research, Why analyze the Impact of
COVID-19 on the economy of micro, small and
medium-sized companies in Mexico. For the
qualitative analysis, we start from statistical data
from the 2019 economic census, results provided
as of June 2020.
4. Results
Answering the research question why analyze
the Impact of COVID-19 on the economy of
micro, small and medium-sized companies in
Mexico.
4.1 The other tragedy as a consequence of
COVID-19, closure of MSMEs
For Téllez (2020), According to the study on
Business Demography (EDN) 2020 published
by the National Institute of Statistics and
Geography (Inegi), the other tragedy is the
closing to December of the current year of 1
´000,000 one million MSMEs, this represents
20% of the companies that existed in 2019, this
is a true tragedy because it is the backbone of the
economy in Mexico and because of the number
of jobs they generate and their contribution to the
domestic product stupid.
This consequence has its impacts on the
loss of almost four million jobs of almost 20%,
this due to the businesses that finally closed and
due to the decrease in jobs of those that survived
but had a decrease in their sales and production.
In the same way, the third impact was on the
generation of income of 21%, the COVID-19
pandemic definitely has an impact on the
economy of MSMEs in Mexico. This will result
in thinking about a rapid recovery from the
economic crisis, it is presumed that until the year
2022 due to the loss of companies, jobs and
decreased income.
Figure 4 Companies that close during the covid-19
pandemic. With data from INEGI, of own elaboration
4.2 Survival strategies for MSMEs against
COVID-19
For Cardona (2020), one of the survival
strategies in the face of the most complex
economic scenarios the world has ever
experienced is the use of technology. It is
expected that one out of every five companies
will close their doors permanently during the
following pandemic months and many others
will decrease their income considerably, so
companies must change their way of
manufacturing and marketing their products to
face the pandemic health and economic health in
recent years.
Electronic commerce is expected to have
an increase of at least 60%, this pandemic came
to accelerate the way of selling and buying
products and services within the health and
economic ills in terms of technology accelerated
us and revolutionized a 1000 % making us use
technological tools to their maximum capacity if
we want to survive and be on the list of
companies that survive this COVID-19
pandemic. Let's just hope that these types of
companies see digitization as an investment and
not as an unnecessary expense is the taboo that
each company has to go through to have a
survival strategy.
4.3 Tips for MSMEs in time of the COVID-19
pandemic
For Castro (2020), one of the main tips is to
investigate what our competitors are doing to
survive and follow in their footsteps.
Another important tip is to act
responsibly and respect the guidelines of
operating responsibly to take care of our
employees and customers.
Companies
that survive
80%
Companies
that closed
20%
Companies that close in a covid-19 pandemic
Companies that survive
Companies that closed
5
Article Journal-Macroeconomics and Monetary Economy December, 2020 Vol.4 No.7 1-6
SERRANO-TORRES, Ma. Guadalupe, ZAMBRANO-BALDIVIEZO,
Oscar Javier, QUEZADA-FLORES Ma. de la Luz and MÁRQUEZ-DE ANDA Camilo. Impact of COVID-19 on the economy of micro, small
and medium enterprises in Mexico. RINOE Journal-Macroeconomics
and monetary economy. 2020
ISSN-On line: 2524-2040
RINOE® All rights reserved.
Likewise, be resistant to change and lead
our company or business to change and
digitization with responsibility and tranquility.
On the other hand, maintain contact with
our clients digitally through social networks and
other internet media.
In the same way, use the digital resources
available by our company.
The use of innovation in the production
and marketing of products and services is an
excellent strategy for the survival of companies
in general.
Likewise, increased productivity and
competitiveness are a survival tool that can make
the difference between disappearing and
remaining, despite the economic contingency.
And finally, adopt market research
techniques, by staying close to our clients
through social networks and also to our
suppliers.
Acknowledgments
We thank the Technological University of León
UTL for its support for this research to be
published.
Conclusions
The MIPYMES under study economic structure
of Mexico and of each of the countries
worldwide due to their high representation,
suffered in this pandemic a very delicate
economic and financial situation by putting their
survival at risk and being on the brink of closure
definitively, They are tasked with digitizing their
processes and way of marketing their products
and making their purchases electronically.
The mortality statistics increased during
the quarantine carried out by each of the states
and which was occurring gradually as the traffic
lights changed from green to red and put people's
lives and health at risk, the statistics thus
confirmed according to the economic census to
the year 2019 where 20% of the companies
closed permanently and 21% of the jobs were
lost causing an unemployment problem that the
federal government had to solve with support to
companies, granting loans and support.
Revenues also decreased. It is concluded
that the pandemic did have a direct relationship
with the economic and financial impact of
MSMEs. In addition, it is recommended as
survival strategies the use of technology is
recommended when digitizing the
commercialization of products and services
offered by companies as well as the way to
supply their inputs.
It is concluded that innovation is an
excellent survival strategy in the face of this
pandemic and can make the difference between
closing down or staying alive despite the
economic turbulence.
Increasing the productivity of the
company is another excellent strategy to
improve the production of the products or
services of the companies under study. To
achieve survival and reduce the economic and
financial impact within the company.
References
Blancas (2020), Expansión, “Cierre de COVID-
19 en México”, recuperado en;
https://politica.expansion.mx/mexico/2020/12/3
1/covid-19-mexico-cierra-el-ano-con-125-807-
muertes-y-1-millon-426-094-
casos?utm_source=push_notification
Cardona (2020), Forbes, “Tecnología: la clave
para que las PyMEs sobrevivan a la nueva
normalidad”, recuperado en;
https://www.forbes.com.mx/tecnologia-la-
clave-para-que-las-pymes-sobrevivan-a-la-
nueva-normalidad/
Castro (2020), Instituto Tecnologico de
Monterrey, Campus Sonora, “Consejos para la
supervivencia de las MIPYMES en pandemia
COVID-19, recuperado en;
https://tec.mx/es/noticias/sonora-
norte/institucion/estrategias-y-consejos-para-
pymes-en-tiempos-de-pandemia
International Trade Centre, junio (2020), SME
Competitiveness Outlook 2020: COVID-19: The
Great Lockdown and its Impact on Small
Business, junio (2020), , ISBN: 978-92-1-
103677-0, UN Sales Number: E.20.III.T.2,
recuperado en:
https://www.intracen.org/uploadedFiles/intrace
norg/Content/Publications/ITCSMECO2020.pd
f
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Article Journal-Macroeconomics and Monetary Economy December, 2020 Vol.4 No.7 1-6
SERRANO-TORRES, Ma. Guadalupe, ZAMBRANO-BALDIVIEZO,
Oscar Javier, QUEZADA-FLORES Ma. de la Luz and MÁRQUEZ-DE ANDA Camilo. Impact of COVID-19 on the economy of micro, small
and medium enterprises in Mexico. RINOE Journal-Macroeconomics
and monetary economy. 2020
ISSN-On line: 2524-2040
RINOE® All rights reserved.
Maravato (2020), Expansión “El efecto covid-
19, en las PYMES, recuperado en:
https://expansion.mx/opinion/2020/06/12/el-
efecto-covid-19-en-las-pymes
Proum, (2020), Forbes, “El estornudo del
COVID-19 en las MIPYMES, Mexicanas”,
recuperado de: https://www.forbes.com.mx/el-
estornudo-del-covid-19-en-las-pymes-
mexicanas/
Organización Mundial de la Salud OMS, (2020),
“El brote de la enfermedad COVID-19”,
recuperado de:
https://www.who.int/es/emergencies/diseases/n
ovel-coronavirus-
2019?gclid=EAIaIQobChMIs77n0M357QIVS
ODACh3tFQiLEAAYASAAEgJkZPD_BwE
Téllez (2020), “La otra tragedia por pandemia
cierran un millón de mipymes”, recuperado en;
https://www.elfinanciero.com.mx/empresas/ma
s-de-un-millon-de-pymes-bajaron-las-cortinas-
de-manera-definitiva-por-el-covid-inegi
7
Article Journal-Macroeconomics and Monetary Economy December, 2020 Vol.4 No.7 7-15
Economic repercussions of COVID-19 on micro and small enterprises: A case study
in Atlacomulco, Mexico
Repercusiones económicas por el covid-19 en las micro y pequeñas empresas:
Estudio de caso en Atlacomulco, méxico
CARRILLO-ÁNGELES, Rebeca Yurani1*†, ALCÁNTARA-MANCILLA, Marycarmen2 and CRUZ-
SORIANO, Emmanuel2
1Universidad Politécnica de Atlacomulco y Universidad Autónoma del Estado de México. 2Universidad Politécnica de Atlacomulco
ID 1st Author: Rebeca Yurani, Carrillo-Ángeles / ORC ID: 0000-0002-6380-5805, CVU CONACYT ID: 175471
ID 1st Coauthor: Marycarmen, Alcántara-Mancilla
ID 2nd Coauthor: Emmanuel, Cruz-Soriano / ORC ID: 0000-0003-0393-4936, arXiv Author ID: emmanuelcruz1991
DOI: 10.35429/JMME.2020.7.4.7.15 Received August 19, 2020; Accepted December 18, 2020
Abstract
Currently the whole world is going through a health
contingency due to the COVID-19 disease, a situation that has
triggered countless changes in different sectors of society.
Among the various problems derived from this situation are
the negative effects on the economy, since the condition in
which the different economic agents find themselves is not
favorable. Companies in all countries have been suffering the
consequences within their life cycle, some of them having to
close permanently and others looking for strategies not to die,
or simply trying to survive. In Mexico, certain organizations
analyze the damage that has affected the national economy,
however, the information found in the different documents
shows generalized data, and these effects cannot be identified
locally. As a consequence, the objective of this study was to
analyze the Micro and Small Enterprises (MSEs) in
Atlacomulco, Mexico. For which, an instrument was
developed with the indicators of the survey on the Economic
Impact Generated by COVID-19 in Companies (ECOVID-
IE) (INEGI, 2020). The study was made up of a sample of 40
MSEs from the study area, the main results show that the
MSEs considered have been strongly affected.
Competitiveness, Comercial Positioning, Diversification
Resumen
Actualmente todo el mundo está pasando por una
contingencia sanitaria a causa de la enfermedad del COVID-
19, situación que ha desencadenado un sinfín de cambios en
los diferentes sectores de la sociedad. Entre las diversas
problemáticas derivadas de esta coyuntura se encuentran los
efectos negativos a la economía, puesto que la condición en
la que se encuentran los diferentes agentes económicos no es
favorecedora. Empresas de todos los países han estado
sufriendo las consecuencias dentro de su ciclo de vida,
algunas de ellas teniendo que cerrar definitivamente y otras
buscando estrategias para no morir, o simplemente tratando
de sobrevivir. En México, ciertos organismos analizan los
estragos que han repercutido en la economía nacional, sin
embargo, la información que se encuentran en los distintos
documentos muestra datos generalizados, y no se pueden
identificar dichos efectos de manera local. Como
consecuencia, el objetivo de este estudio fue analizar las
Micro y Pequeñas Empresas (Mypes) en Atlacomulco,
México. Para lo cual se elaboró un instrumento con los
indicadores de la encuesta sobre el Impacto Económico
Generado por COVID-19 en las Empresas (ECOVID-IE)
(INEGI,2020). El estudio se integró por una muestra de 40
Mypes de la zona de estudio, los principales resultados
muestran que las Mypes consideradas han sido fuertemente
afectadas.
COVID-19, Impacto Económico, Mypes
Citation: CARRILLO-ÁNGELES, Rebeca Yurani, ALCÁNTARA-MANCILLA, Marycarmen and CRUZ-SORIANO,
Emmanuel. Economic repercussions of COVID-19 on micro and small enterprises: A case study in Atlacomulco, Mexico.
RINOE Journal- Macroeconomics and monetary economy. 2020. 4-7: 7-15
* Correspondence to Author (e-mail: yurani@colpos.mx)
† Researcher contributing first author.
© RINOE Journal – Taiwan www.rinoe.org/taiwan
8
Article Journal-Macroeconomics and Monetary Economy December, 2020 Vol.4 No.7 7-15
CARRILLO-ÁNGELES, Rebeca Yurani, ALCÁNTARA-MANCILLA,
Marycarmen and CRUZ-SORIANO, Emmanuel. Economic repercussions of COVID-19 on micro and small enterprises: A case study
in Atlacomulco, Mexico. RINOE Journal- Macroeconomics and
monetary economy. 2020
ISSN-On line: 2524-2040
RINOE® All rights reserved.
Introduction
The year 2020 has represented a global
challenge, derived from the appearance of the
SARS-CoV-2 virus responsible for the COVID-
19 disease, which had its first manifestations in
Wuhan, a province of the People's Republic of
China at the end of 2019 and that on January 30,
2020, it was declared by the World Health
Organization (WHO) as a Public Health
Emergency of International Importance (ESPII).
This situation has triggered a series of
effects in different sectors, not only in the field
of health, but also in the economy, which,
although all countries are suffering the negative
effects, emerging countries such as Mexico have
a panorama more complex, since since before
this health situation appeared, in 2019 the
country's growth was -0.3, now with the
measures that have had to be implemented and
that have caused changes in both supply and
demand, the International Monetary Fund has
estimated an even lower growth, being alarming
the fact that each update it carries out, this
number is lower, at least for 2020, until its last
update (June 2020) a growth of -10.5 is
estimated, leaving thus some uncertainty as to
how these repercussions will worsen, which will
depend to a large extent on the duration of the
pandemic and on adaptation to the new normal.
The National Institute of Statistics and
Geography (INEGI), between May and June
2020, conducted a survey of companies on the
economic impact generated by COVID-19. One
of the results obtained is that of more than half
of the surveyed companies had some type of
unemployment and of these entities, 93% are
represented by micro-companies.
However, the information found in the
various documents shows generalized data, and
the economic repercussions cannot be identified
locally.
In this context, the objective of this study
was to analyze the Micro and Small Companies
(MSEs) in Atlacomulco, Mexico. For which, an
instrument was developed with the indicators of
the survey on the Economic Impact Generated
by COVID-19 in Companies (ECOVID-IE)
(INEGI, 2020). The study was made up of a
sample of 40 MSEs from the study area, the main
results show that the MSEs considered have
been strongly affected.
The central hypothesis of this research
supports that the COVID-19 pandemic has had a
significant impact on the low level of income of
micro and small companies located in
Atlacomulco, Mexico.
Based on the above, the first section of
this research presents the background section,
also the importance of companies in the Mexican
economy and a brief economic description of the
study context In the second section, an overview
of the COVID-19 pandemic is provided, and
particularly in the study area.
Finally, in the third section, an overview
of the impact of COVID-19 on the Mexican
economy is presented.
Background
Due to the development of the COVID 19
pandemic, the economies of all countries have
suffered the effects of this, so certain
organizations or institutions at the global and
national level have been given the task of
carrying out studies where they unfold the
economic panorama Based on it, they have made
projections of how the economy will behave in
the coming months.
At a global level, the International
Monetary Fund (2020) has prepared a series of
documents that address issues derived from the
pandemic, such as regional economic prospects,
reports on global financial stability, prospects
for the world economy, among others, which As
the months go by, they make updates, it is the
case of the last mentioned document, in which
based on the fluctuations that the economies are
presenting, the projections made by this
organization change, one of the indicators that
has evidently been transformed with the April,
June and October updates is the percentage of
economic growth.
At the regional level, the Economic
Commission for Latin America and the
Caribbean (2020) has also issued publications
regarding the effects of COVID 19 on the
economy, such as the series of public policy
documents where indicators such as
unemployment are analyzed. , poverty, liquidity
of small and medium-sized companies and
economic growth.
9
Article Journal-Macroeconomics and Monetary Economy December, 2020 Vol.4 No.7 7-15
CARRILLO-ÁNGELES, Rebeca Yurani, ALCÁNTARA-MANCILLA,
Marycarmen and CRUZ-SORIANO, Emmanuel. Economic repercussions of COVID-19 on micro and small enterprises: A case study
in Atlacomulco, Mexico. RINOE Journal- Macroeconomics and
monetary economy. 2020
ISSN-On line: 2524-2040
RINOE® All rights reserved.
Similarly, in the month of October 2020,
an economic study of the region was published,
which also exposes the situation experienced by
the countries of that region in the different
economic sectors, taking into account indicators
such as GDP, inflation, employment and
informality, while posing macroeconomic
policies and future scenarios.
At the national level, the Bank of Mexico
produces quarterly reports, in which it is not
possible to avoid addressing the issue of the
pandemic and its effects on the economy.
Likewise, it conducts monthly surveys on the
Expectations of Private Sector Economics
Specialists (2020), where the behavior of aspects
such as economic growth, inflation, interest rate,
exchange rate and finances are taken into
account. Some of these data are later taken up by
the Belisario Domínguez Institute of the Senate
of the Republic in several of its publications
where it makes some comparisons between
previous months, such as the case of the analysis
of the microeconomic framework of the General
Criteria for Economic Policy 2021 (2020).
In the article in the journal plurality and
consensus, Clavelina and Domínguez (2020)
present a series of comparisons around
indicators such as the exchange rate, the price of
oil, debt, among others, analyzing the data issued
by institutions such as banks, the Ministry of
Finance and Public Credit, the Bank of Mexico,
which, without a doubt, despite certain
variations between said data, are showing the
repercussions on the national economy.
Importance of companies in the Mexican
economy
The company is an entity that works with various
resources, which generate different benefits, not
only for the owner or partners, as the case may
be, but also for other stakeholders, such as
suppliers, customers, because at the time that the
company enters the market, opens up the range
of options for the consumer, thereby generating
a higher level of competition, which helps all
companies that share that market focus on
generating a competitive advantage to capture
the largest share market possible. In this way, the
government also obtains income through tax
contributions to which companies that are
registered under any tax regime are creditors.
Other arguments by which companies
acquire importance Munch (2007) points out as
follows:
They create sources of work.
They meet the needs of the community
by producing socially necessary goods
and services.
They promote economic and social
development by encouraging
investment.
They promote research and technological
development.
Provide returns to investors.
Economic sectors
The economic sectors in which companies
operate in Mexico are:
a) Primary sector
It includes all activities where natural resources
are used as they are obtained from nature, either
for food or to generate raw materials.
b) Secondary sector
It is characterized by the predominant use of
machinery and increasingly automated processes
to transform raw materials obtained from the
primary sector. It includes factories, workshops,
and laboratories of all types of industries.
According to what they produce, their major
divisions are construction, manufacturing, and
electricity, gas, and water.
c) Tertiary sector
Material goods are not produced in the tertiary
sector of the economy; products made in the
secondary sector are received for sale; it also
offers us the opportunity to take advantage of a
resource without becoming the owner of it, as is
the case with services. Likewise, the tertiary
sector includes communications and transport.
Denomination 2019 2020
4T 1T 2T GDP, at market
Price 18,364,393 18,150,723 15,055,411
Primary Act 595,887 600,629 588,407
Act. Sec. 5,249,195 5,191,369 3,974,458
Act. Terc. 11,699,255 11,594,701 9,846,249
Table 1 Comparison of GDP in Mexico (2019-2020).
INEGI, 2020
10
Article Journal-Macroeconomics and Monetary Economy December, 2020 Vol.4 No.7 7-15
CARRILLO-ÁNGELES, Rebeca Yurani, ALCÁNTARA-MANCILLA,
Marycarmen and CRUZ-SORIANO, Emmanuel. Economic repercussions of COVID-19 on micro and small enterprises: A case study
in Atlacomulco, Mexico. RINOE Journal- Macroeconomics and
monetary economy. 2020
ISSN-On line: 2524-2040
RINOE® All rights reserved.
On the other hand, for the study of the
data and information that is generated around all
economic activities, Mexico uses the 2018 North
American Industrial Classification System, with
which the INEGI (2018) emphasizes that this
structure serves to “ standardize and harmonize
the economic information that is produced in the
Mexican territory (...) and thus respond to the
demands of users regarding information of
national interest "
With this system that goes from the
sector, subsector, branch, sub-branch and class,
it is much easier to access the information
derived from all the instruments applied by
INEGI, and which contribute to having a general
and particular panorama of the economic
situation of the country.
Brief economic description of the study
context
Atlacomulco is a municipality located in the
northwestern part of the State of Mexico, which,
according to INEGI (Intercensal Survey, 2015)
has 100,657 inhabitants, made up of 33
communities, a Municipal Head called
Atlacomulco de Fabela and 20 colonies
(Municipal development plan, 2019).
In terms of economic units, from 2013 to
2018, these increased by 25.7%, which means
that there is a record of 5437 units and with this
it went from having an occupied staff of 22,305
to 28,088 people, which represents a 20.5%
more of occupation.
Of these units, the economic activities
that have the most presence are the retail trade,
which represents 51.5% of the total businesses,
which include grocery stores, self-service, sale
of food, beverages, beauty items, stationery,
among others. .
The second activity that stands out in the
municipality is the manufacturing industry with
10.6%, which in turn has the highest number of
employed personnel above retail trade with
37.2% of the total occupation. This last piece of
information is understandable, since companies
in the manufacturing industry tend to have a
larger workforce and retail businesses tend to be
micro or small companies.
Regarding the GDP that it produces,
figure 1 shows how its production has increased
some base points from one year to another, being
that in relation to the last year, that is, 2018 is the
municipality, a member of the region II, which
contributes the most to the state GDP, with
almost one percentage point unlike the other
municipalities that make up said region that only
reach .1 percentage point.
Graphic 1 Behavior of GDP in Atlacomulco 2008-2018.
Institute of Geographic, Statistical and Cadastral
Information and Research of the State of Mexico
(IGECEM), 2019
Covid 19 pandemic
According to the World Health Organization
(2020), coronaviruses are an extensive family of
viruses that can cause disease in both animals
and humans. In humans, various coronaviruses
are known to cause respiratory infections that
can range from the common cold to more serious
illnesses such as Middle East respiratory
syndrome (MERS) and severe acute respiratory
syndrome (SARS). The most recently
discovered coronavirus causes the coronavirus
disease COVID-19.
Martinez, Torres and Orozco (2020)
mention that the transmission of the virus occurs
“by contact with an infected person, through
small drops that are expelled when talking,
coughing and sneezing, or by touching a surface
or object that has the virus and subsequently
manipulate the mouth, nose or eyes. "
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
GD
P i
n m
illi
ons
of
pes
os
11
Article Journal-Macroeconomics and Monetary Economy December, 2020 Vol.4 No.7 7-15
CARRILLO-ÁNGELES, Rebeca Yurani, ALCÁNTARA-MANCILLA,
Marycarmen and CRUZ-SORIANO, Emmanuel. Economic repercussions of COVID-19 on micro and small enterprises: A case study
in Atlacomulco, Mexico. RINOE Journal- Macroeconomics and
monetary economy. 2020
ISSN-On line: 2524-2040
RINOE® All rights reserved.
Over the months, confirmed cases have
presented various symptoms that have been
added to the list, however, studies and research
are still being carried out to provide more
information about this new virus, since it has
been seen that patients suffer from this The
disease reacts differently, depending on their
conditions, which is why it is often confused
with the common flu or other diseases of the
respiratory system. In the same way, it is known
that there are asymptomatic patients who
contracted the virus, but that it is not visible,
which is why the statistics on cases vary a lot due
to these factors.
Development of the disease
Covid.19 was first detected in Wuhan, a
province of the People's Republic of China at the
end of 2019. On January 30, 2020 it was declared
by the World Health Organization (WHO) as a
Public Health Emergency of International
Importance (ESPII) and until March 11 it was
declared a pandemic.
From the appearance of the first case of
this disease until October 11, 2020, according to
weekly reports from the World Health
Organization (2020), more than 37 million
infected and 1 million deaths have been recorded
in the world. 48% of the cases and 55% of the
deaths come from America, being the United
States, Brazil and Argentina where the largest
number of cases occurs.
In Mexico, the first case appeared on
February 27, 2020 () and so far 814, 328
confirmed cases and 83,642 deaths have been
reported due to Covid-19. Until October 11, it is
in the fourth country with the highest number of
infected and dead, only after Argentina.
According to the Secretary of Health of
the Government of the State of Mexico (2020),
in the municipality of Atlacomulco, until the
second week of October 2020, 754 cases have
been confirmed, of which, unfortunately, 72
deaths are reported. Of the 125 municipalities, it
is in position 25 in terms of the number of
cases.The behavior of the increase in cases in the
municipality can be seen in graph2, where it can
be seen that cases from one month to another
have been increasing, the lowest percentage of
increase with 27.3% was from August to
September, without.
However, the epidemiological risk traffic
light continues in orange, where non-essential
economic activities are still operating at 30%.
Graphic 2 COVID-19 cases and deaths in Atlacomulco
2020. Secretary of Health of the Government of the State
of Mexico, 2020
Impact of COVID-19 on the economy
The whole world has been suffering the ravages
of the Covid-19 pandemic, not only in regard to
the health sector, which is what it is directly
related to, but indirectly it is also affecting other
areas such as the economy, and Although all
governments have been implementing certain
economic, monetary and fiscal policies to cope
with the effects of this pandemic, their recovery
will depend on the duration of said health
contingency. In the case of Mexico, as
Clavellina and Domínguez (2020) note, lower
economic growth, the fall in the price of oil, the
depreciation of the currency and the reduction in
the country's sovereign note exert pressure on
public finances.
Economic growth
As time goes by, the world economic panorama
changes, taking into account the behavior of the
pandemic and the way in which governments are
reacting to it, with all this, there is a fairly high
level of uncertainty that means that the future
recovery will not look clear. With these factors,
various organizations and institutions have made
projections of how 2020 will close in relation to
economic growth, this is the case of the
International Monetary Fund (IMF) (2020),
which in April had predicted -3% growth, but
only two months later, the same body publishes
an update where the projection contracts to
4.9%.
0
100
200
300
400
500
600
700
800
Cases Deaths
12
Article Journal-Macroeconomics and Monetary Economy December, 2020 Vol.4 No.7 7-15
CARRILLO-ÁNGELES, Rebeca Yurani, ALCÁNTARA-MANCILLA,
Marycarmen and CRUZ-SORIANO, Emmanuel. Economic repercussions of COVID-19 on micro and small enterprises: A case study
in Atlacomulco, Mexico. RINOE Journal- Macroeconomics and
monetary economy. 2020
ISSN-On line: 2524-2040
RINOE® All rights reserved.
In the particular case of Mexico, the
economic scenario was not in better before the
pandemic situation, since in 2019 there was a
GDP of -0.3 and now the IMF (2020) projects a
growth of -10.5% and is expected to start a
recovery in 2021 that helps to have a growth of
3.3% for that year.
These forecasts may change according to
the data that emerge at the end of the second
quarter and everything that happens during the
third quarter of 2020, but what is imminent is
that the recovery will occur slowly and
gradually, which although in the case of Mexico
will depend on how the situation of the United
States of America is, a country that is the most
important trading partner, it will not have an
immediate recovery either, despite the fact that
it is an advanced economy, since the outlook in
which it finds itself The pandemic is critical,
ranking first in the American continent in
infections.
At the level of Latin America and the
Caribbean, Bárcena (2020) proposed three
recovery scenarios according to the average rate
and GDP that existed in 2019 before the
pandemic, remaining as expressed in Table 2.
Average rate Year to be reached in 2019
GDP
3.0% 2023
1.8% (rate of the last decade) 2015
0.4% (rate of the last six-year
period)
After 2030
Table 2 Economic recovery scenarios. Economic
Commission for Latin America and the Caribbean
(ECLAC) 2020
The economy also depends on other
uncertain factors, which the IMF mentions
(2020):
The duration of the pandemic and the
necessary confinements.
Voluntary social distancing, which will
affect spending.
The ability of posted workers to obtain
employment in possibly different
sectors.
Scarring caused by company closures
and the departure of workers from the
workforce, which could make it difficult
to recover the activity once the pandemic
is over.
Methodology to be developed
In order to analyze the economic repercussions
of the micro and small companies of
Atlacomulco, Mexico, it is established as an
assumption that the COVID-19 pandemic has
had a significant impact on the low level of
income of micro and small companies located in
said municipality.
Within the framework of the above, an
information collection instrument was used
based on the indicators of the survey on the
Economic Impact Generated by COVID-19 in
Companies (ECOVID-IE), which considers the
dimensions: Income, Impact, Strategies
implemented, Indebtedness and Forecasts.
The data source for this research was 40
micro and small businesses located in the
municipality of Atlacomulco, Mexico, which
were selected through simple random sampling.
Sample size
𝑛 =𝑁 𝑥 𝑍2 𝑥 𝑝 𝑥 𝑞
𝐸2 𝑥 (𝑁−1)+𝑍2 𝑥 𝑝 𝑥 𝑞 (1)
𝑛 =700 𝑥 1.962 𝑥 0.50 𝑥0.50
0.152 𝑥 (700−1)+1.962 𝑥 0.50 𝑥 0.50
𝑛 = 40
Sampling frame
The sampling frame used to obtain the sample is
based on the information provided by Economic
Development of the Atlacomulco municipality,
which until November 2020 has registered 700
establishments in the central area of the
municipality and the Santo Domingo Shomejé
community. Based on the above, in Table 3, the
sample card is established:
Universe population Micro and small businesses in
the center of the municipality of
Atlacomulco and the community
of Santo Domingo Shomejé
Universe size 700
Measuring instrument. Survey
Sampling method Simple random sampling
Sample size 40
Error 0.15
Confidence level 95%
Table 3 Technical file of the investigation
Own elaboration, 2020
13
Article Journal-Macroeconomics and Monetary Economy December, 2020 Vol.4 No.7 7-15
CARRILLO-ÁNGELES, Rebeca Yurani, ALCÁNTARA-MANCILLA,
Marycarmen and CRUZ-SORIANO, Emmanuel. Economic repercussions of COVID-19 on micro and small enterprises: A case study
in Atlacomulco, Mexico. RINOE Journal- Macroeconomics and
monetary economy. 2020
ISSN-On line: 2524-2040
RINOE® All rights reserved.
Results
Income
Income is a variable that provides valuable
information so that business owners can make
decisions about the profitability of the economic
activity they are carrying out. As can be seen in
Table 4, most of the companies surveyed have
had considerable effects, since 27.5% have
presented a contraction of economic income
between 51 and 70%, 25% have had decreases of
between 31% and 50%. A 12.5% notice a
reduction in their income of more than 70% that
puts the economic entity in an unfavorable
situation.
Reply Frequency Percentage
Between 1% - 10% 3 7.5%
Between 11% - 30% 9 22.5%
Between 31% - 50% 10 25.0%
Between 51% - 70% 11 27.5%
More than 70% 5 12.5%
Total 40 100.0%
Table 4 Decrease in income in the micro and small
companies of Atlacomulco, 2020
Graphic 3 Decrease in income in the micro and small
companies of Atlacomulco 2020
Affectation
Regarding the level of affection of your
company in the face of the contingency, the
result is that 45% of these organizations were
strongly affected and 42.5% were moderately
affected, thus leaving only 12.5% slightly
affected or not have had negative repercussions.
Reply Total
Frequency Percentage
They have not been affected 1 2.5%
Slightly affected 4 10.0%
Moderately affected 17 42.5%
Heavily affected 18 45.0%
Total 40 100%
Table 5 Levels of affection of the micro and small
companies of Atlacomulco, 2020
The pandemic situation has impacted in
different ways on the way micro and small
businesses operate. The main impact was the
temporary closure, where 45% of the businesses
mentioned that, derived from the red indicator of
the epidemiological traffic light, they were not
allowed to work physically, since they did not
offer essential products or services.
The second affectation, experienced by
37.5% of those surveyed, was the reduction in
investments, a fact that is not surprising, since if
there is no flow of operations in the
commercialization, therefore what was already
invested does not generate benefits that
encourage to reinject capital, in addition to the
fact that uncertainty plays a very important role
in making decisions when investing, since it is
not known precisely when an effective solution
will be found to combat health problems, making
the risk much greater, so that the owners of the
establishments present aversion to said risk.
Implemented strategies
To combat the aforementioned economic and
operational effects, 25% of the companies had to
temporarily reduce their employment, obviously
because most of them had to for physical
operations. This triggers the increase in
unemployment, which at the same time causes
families in general to have purchasing power
that contributes to the purchase of essential and
non-essential products and services, thus
reducing the behavior of all economic agents.
In the same way, 22.5% saw the need to
implement online sales and increase their
marketing efforts to publicize the new
distribution channel for products and services.
On the other hand, a somewhat alarming
situation is seen that there are 25% of
establishments that mentioned not having
implemented any strategy that could promote the
improvement of their situation, being that most
of these organizations have had a considerable
contraction in their income.
0
2
4
6
8
10
12
1
Between 1% - 10% Between 11% - 30%
Between 31% - 50% Between 51% - 70%
More than 70% My income did not decrease
14
Article Journal-Macroeconomics and Monetary Economy December, 2020 Vol.4 No.7 7-15
CARRILLO-ÁNGELES, Rebeca Yurani, ALCÁNTARA-MANCILLA,
Marycarmen and CRUZ-SORIANO, Emmanuel. Economic repercussions of COVID-19 on micro and small enterprises: A case study
in Atlacomulco, Mexico. RINOE Journal- Macroeconomics and
monetary economy. 2020
ISSN-On line: 2524-2040
RINOE® All rights reserved.
That said, it is important to recognize that
the fault of the deterioration in the operations of
these companies is not only the situation that is
being experienced, but also that the members of
these businesses are not reacting to the new way
of selling, nor are they giving to the task of
rethinking their value chain, so they are at
greater risk, even if they themselves determine
that they do not predict closure.
Indebtedness
Another variable that must be taken into account
is indebtedness, which 27.5% of micro and small
entrepreneurs have, taking this group as 100%,
27.2% had to choose to reprogram them as a
containment measure.
Reply Frequency Percentage
Yes 11 27.5%
No 21 52.5%
Does not know 8 20.0%
Total 40 100.0%
Table 6 Indebtedness of the micro and small companies of
Atlacomulco, 2020
Forecasts
Despite these statements, the majority of owners
and managers with 77.5% do not foresee a
closure of their establishments, so it can be
inferred that the conditions under which they
operate will not be the best, since, as has already
been reviewed , the income that they have been
receiving during the contingency has decreased
considerably. However, 22.5% of those
surveyed do predict a definitive closure of the
company because the situation that began at the
end of March will not allow them to continue
offering their services.
Reply Frequency Percentage
No commercial closure is expected 31 77.5%
1 month or less 5 12.5%
6 months or more 4 10.0%
No commercial closure is expected 31 77.5%
Total 40 100.0%
Table 7 Forecast of closure of the micro and small
companies of Atlacomulco, 2020
Acknowledgments
The authors express a wide appreciation to the
Universidad Politécnica de Atlacomulco for the
facilities granted to carry out this research.
We also reiterate our most sincere thanks
to ECORFAN-México, S.C, for its contribution
to scientific and technological dissemination, in
view of the performance of free services in favor
of authors.
Conclusions
According to all the data obtained and analyzed,
it was observed that the micro and small
companies of the chosen geographical regions,
which in this case, as mentioned in the master
framework, were the head of Atlacomulco and
the community of Santo Domingo Shomejé have
been severely affected, since most are engaged
in economic activities determined as non-
essential according to what was considered in
the containment measures against the COVID-
19 pandemic.
Likewise, it can be said that the proposed
hypothesis was verified, having that 93.5% of
the micro and small companies that participated
in the study, presented some level of income
contraction and only 6.5% had no effects on
them.
It is important to highlight that transport
is one of the most affected sectors since its
income has decreased between 50% and 70% in
the case of study.
The economic recovery presents an
unclear scenario, neither in time nor in form.
The Economic Commission for Latin America
(ECLAC) has already projected several
scenarios, where the best scenario is that the
economy returns to normal levels in 2023, but it
also contemplates the possibility that said
improvement will occur until 2030.
This gives a guideline to reflect on the
fact that the situation may worsen and that it is
necessary for economic actors to be studied,
must be forewarned and alert. In the case of
companies, making contingency plans for those
who still do not have one and those who have
already worked on them, strengthen them and
adapt them to what is happening and anticipating
future situations, since the economy is based on
uncertainty and it is necessary to find a way to
minimize it, being prepared for any future
scenario.
15
Article Journal-Macroeconomics and Monetary Economy December, 2020 Vol.4 No.7 7-15
CARRILLO-ÁNGELES, Rebeca Yurani, ALCÁNTARA-MANCILLA,
Marycarmen and CRUZ-SORIANO, Emmanuel. Economic repercussions of COVID-19 on micro and small enterprises: A case study
in Atlacomulco, Mexico. RINOE Journal- Macroeconomics and
monetary economy. 2020
ISSN-On line: 2524-2040
RINOE® All rights reserved.
References
Alzúa, M., & Gosis, P. (s.f.). Impacto Social y
Económico de la COVID-19 y opciones de
política pública en Argetina. Obtenido de
https://www.latinamerica.undp.org/content/rbla
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Ayuntamiento Constitucional de Atlacomulco
2019-2021. (2019). Gaceta Municipal.
Atlacomulco. Obtenido de
http://atlacomulco.gob.mx/documentos/Gacetas
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201%20Numero%206%20Volumen%201.pdf.
Ayuntamiento de Atlacomulco. (2019). Plan de
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http://atlacomulco.gob.mx/documentos/Uippe/P
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Banco de México. (s.f.). Política Monetaria.
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http://educa.banxico.org.mx/banco_mexico_ban
ca_central/politica-monetaria-banco-mexi.html.
Clavellina Miller, J. L., & Domínguez Rivas, M.
(Abril de 2020). Implicaciones económicas y
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Comisión Económica de América Latina y el
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Comisión Económica para América Latina y el
Caribe (CEPAL). (Abril de 03| de 2020).
Coyuntura, escenarios y proyecciones hacia
2030 ante la presente crisis de Covid-19.
Obtenido de
https://www.agendavenezuela2030.org/wp-
content/uploads/Alicia-Barcena-CEPAL-PPT-
Impacto-COVID-19-en-ALC-3-Abr-
2020.pdf.pdf.pdf.pdf.
Fondo Monetario Internacional. (2020).
Actualización de las perspectivas de la
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https://www.imf.org/es/Publications/WEO/Issu
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INEGI. (2020). Censos Económicos 2019.
Resultados definitivos., (págs. 33-35).
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Geográfica, Estadística y Catastral del Estado de
México. (2019). Producto Interno Bruto
Municipal 2019. Toluca, Estado de México:
Gobierno del Estado de México. Obtenido de
https://igecem.edomex.gob.mx/sites/igecem.edo
mex.gob.mx/files/files/ArchivosPDF/Productos
-Estadisticos/PIBMun_19.pdf
Martínez Soria, J., Torres Ramírez, M., &
Orozco Rivera, E. (2020). Características,
medidas de política pública y riesgos de la
pandemia del Covid-19. México: Instituto
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México, B. d. (1 de Octubre de 2020). Encuesta
sobre las Expectativas de los Especialistas en
Economía del Sector Privado:Septiembre de
2020. Obtenido de Banco de México:
https://www.banxico.org.mx/publicaciones-y-
prensa/encuestas-sobre-las-expectativas-de-los-
especialis/%7BD15814A6-2599-54F5-4097-
6F37EAD5B27B%7D.pdf.
Organización Mundial de la Salud. (2020).
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16
Article Journal-Macroeconomics and Monetary Economy December, 2020 Vol.4 No.7 16-27
Solutions and strategies of Nezahualcoyotl´s business before the pandemic
Soluciones y estrategias de los negocios de Nezahualcóyotl ante la pandemia
GUTIÉRREZ-ZEPEDA, Martha del Pilar*†
Universidad Tecnológica de Nezahualcóyotl
ID 1st Author: Martha del Pilar, Gutiérrez-Zepeda / ORC ID: 0000-0003-0256-8874
DOI: 10.35429/JMME.2020.7.4.16.27 Received July 20, 2020; Accepted December 10, 2020
Abstract
This work helped us to understand the problems faced by
businesses in the Nezahualcóyotl city and the metropolitan
area in order to generate the appropriate strategies to help
them to increase sales without large investments,for this
purpose a non-experimental research was carried out with
a quantitative approach and a descriptive design taking
into account a probabilistic sample of 370 surveys
randomly with a confidence interval of 95% and a single
error of 5%, the data collection instrument is a structured
questionnaire with closed questions for a greater
objectivity and to ensure that the collection instrument was
appropriate it was carried out a pilot test of 10% of the
sample , it was in order to consider that the interpretation
of the questions were appropriate, when the final
questionnaire was applied the result was that the 41% of
respondents were from Neza, besides it telling us that only
8% of traders received help according to financial support
programs for companies and in relation to strategies that
most generated a sales increase, 45% of businesses use
home deliveries and 53% tell us that they advertise
through social media. On the other hand, it is proposed that
Facebook will be the social network that help them to
spread their products in addition to sending stories related
to them so that they had a better use and to create loyalty
of the product in addition to home delivery with sanitary
and safe conditions established by the Health sector to
provide confidence to the customer. Thanks to this
project, traders who can read thisproject will have a better
view of the solutions they may have to move forward and
not to be part of that 35% of bisinesses to close because
of the pandemic.
Business, Pandemic, Solutions
Resumen
Este trabajo nos ayudó a conocer los problemas a los que
se enfrentan los negocios en el municipio de Ciudad
Nezahualcóyotl y el área metropolitana con el propósito
de generar estrategias apropiadas para ayudarles a
aumentar las ventas sin inversiones grandes, para ello se
llevó a cabo una investigación no experimental con un
enfoque cuantitativo y un diseño descriptivo teniendo en
cuenta una muestra probabilística de 370 encuestas de
forma aleatoria con un intervalo de confianza del 95% y
un error solo del 5%, el instrumento de recolección de
datos es un cuestionario estructurado con preguntas
cerradas para una mayor objetividad y para asegurarse de
que el instrumento de recolección era apropiado se realizó
una prueba piloto del 10% de la muestra, se llevó a cabo
con el fin de considerar que la interpretación de las
preguntas eran adecuadas, al aplicar el cuestionario
definitivo nos dio como resultado que el 41% de los
encuestados provenían del área de Neza, también nos dice
que sólo el 8% de los comerciantes recibieron ayuda de
acuerdo a los programas de apoyo financiero para
empresas y en relación a las estrategias que más a
generado un incremento de ventas, el 45% de los negocios
utilizan las entregas a domicilio y el 53% nos dice que
realizan su publicidad a través de las redes sociales. Por
otro lado, se propone que Facebook sea la red social que
les ayude a difundir sus productos además de enviar
historias relacionadas con ellos para un mejor uso de estos
para crear fidelidad del producto además de la entrega a
domicilio con condiciones sanitarias establecidas por el
sector Salud para que brinde seguridad y confianza al
cliente. Gracias a este proyecto, los comerciantes que
tienen el alcance de esta lectura tendrán una mejor imagen
de las soluciones que pueden tener para avanzar y no ser
parte de ese 35% del cierre de su negocio.
Negocios, Pandemia, Soluciones
Citation: GUTIÉRREZ-ZEPEDA, Martha del Pilar. Solutions and strategies of Nezahualcoyotl´s business before the
pandemic. RINOE Journal- Macroeconomics and monetary economy. 2020. 4-7: 16-27
* Correspondence to Author (e-mail: martha.gutiérrezze@utn.edu.mx)
† Researcher contributing first author.
© RINOE Journal – Taiwan www.rinoe.org/taiwan
17
Article Journal-Macroeconomics and Monetary Economy December, 2020 Vol.4 No.7 16-27
GUTIÉRREZ-ZEPEDA, Martha del Pilar. Solutions and
strategies of Nezahualcoyotl´s business before the pandemic.
RINOE Journal- Macroeconomics and monetary economy. 2020
ISSN-On line: 2524-2040
RINOE® All rights reserved.
Introduction
At the end of 2019 the world detected a new
virus that is passed from person to person,
affecting mainly those who have low defenses,
the virus became known as SARs-Cov2 (known
worldwide as COVID-19), it began in China, it
spread towards Europe and finally arrived in
Mexico and the first case was made known in
February of this year. As of April, the CDMX
was put on a red alert and businesses were
closed, then in March schools were closed
throughout the country, also on those dates
sanitary measures began such as the use of face
masks, use of gel , constant hand washing with
soap and water for 20 seconds and avoid all
kinds of public and / or private meetings with a
maximum capacity of 30 people and not leave
the house only for what is necessary and take
care of the elderly, for all these measures the
businesses from this date on, most did not have
complete knowledge of what was really
happening, some commented that it was a smoke
screen by the Federal Government, others that it
was part of a plan for a businessman to sell more
products and there was no certainty of finding
out about COVID-19.
The vast majority of people did not
continue with their normal lives, affecting the
demand for their businesses every day more,
after one of the measures that affected a lot and
n the economic activity was the official
provision for the closure of businesses and
companies according to the red traffic light as a
measure of physical distancing as indicated by
the guidelines for estimating traffic light risks by
COVID-19 regions (Ministry of Health, August-
2020)
The COVID-19 pandemic has affected
many businesses from all over the world, but in
this research we will only focus on small
businesses in Nezahualcóyotl and the
Metropolitan Area in order to know which
business line is the most affected and thus with
the data that will be obtained, carry out strategies
that help businesses in need.
A non-experimental research was carried
out taking into account a quantitative approach
and a descriptive design with a random
probabilistic sample and the collection
instrument is a questionnaire with closed
questions to take care of the objectivity of the
investigation and according to the Universe of
9973 businesses that are found registered in
MyPES in Nezahualcóyotl, Chalco,
Chimalhuacán, Texcoco, Ixtapaluca and Los
Reyes la Paz, with a confidence interval of 95%
and an error of 5%, therefore the survey was
applied to 370 businesses online and in person.
To take care of the structure of the
questionnaire, a pilot test of 10% of the sample
was applied to ensure that the questions were the
ideal ones to solve this investigation, after
obtaining results the graphs and the
interpretation of each question are made, which
are essential to conclude with appropriate
strategies such as promoting your business
through Facebook, in addition to adding stories
of content related to the business that is offered
as suggested by Merca2.0 magazine where it
indicates that there are three keys to success,
taking into account that today millennials are the
generational segment that most demands from
online portals to place a photograph, an
emotional description and an appropriate price
(Letayf J, 2020) to make them known to
businesses and thus they can increase their sales.
In addition to home delivery with the sanitary
measures recommended by the Health Sector so
that customers are not fearful. That is why this
research is of great importance due to the
implementation of appropriate strategies without
the need to invest more than budgeted since you
can earn more, while offering security and your
client their loyalty.
Chapter I Method
Figure 1.1 Research method
Source of consultation: Own Authorship
Problem Statement.
Design of the investigation.
Sampling method.
Determination of the Universe.
Sample Selection.
Information collection
instrument.
18
Article Journal-Macroeconomics and Monetary Economy December, 2020 Vol.4 No.7 16-27
GUTIÉRREZ-ZEPEDA, Martha del Pilar. Solutions and
strategies of Nezahualcoyotl´s business before the pandemic.
RINOE Journal- Macroeconomics and monetary economy. 2020
ISSN-On line: 2524-2040
RINOE® All rights reserved.
Problem Statement
According to the Survey on the Economic
Impact Generated by COVID-19 (ECOVID-IE),
prepared by the National Institute of Statistics
and Geography (INEGI), (INEGI, 2020)
communicates the following results in relation to
the consequences of the Sanitary measures
especially in the one of "Stay at home" due to the
ignorance on the part of the Population of this
Virus considered in only buying basic basket and
another type of product stopped buying it for that
reason there is a low demand of 72.6%.
Little by little, unfortunately, the most
affected businesses were small with 92%, later
companies and small and medium-sized
companies in 87.8% and it fell a little for large
companies compared to the previous ones only
35.9% and as a consequence the reductions arise
of salaries and / or benefits to their workers up to
41.8%, followed by medium and small
companies in 20.6% and by micro companies
only 18.8%, while other entrepreneurs took more
resounding strategies such as the dismissal of
staff.
Large companies cut their staff by
22.3%, followed by medium and small
companies by 18.6% and by micro companies
only by 15.1%. Subsequently, support arises for
entrepreneurs in order to reactivate the Mexican
economy, but only 7.8% enjoyed this help.
On the other hand, in a Nezahualcóyotl
bulletin where he talks about the participation of
merchants where there are more than 1,800
applications for the economic credit program in
addition to the temporary employment program
to benefit more than 900 inhabitants who have
stayed. without work due to the pandemic in
order to support the Municipal Economic
Reactivation program (Press Release 2020)
With all this, if it is important to
investigate promptly if the support that has been
generated by the government has helped the vast
majority or if the businesses have learned of the
support that has arisen as a consequence of this
new normal, therefore it is necessary know the
opinion of the same merchants who have
suffered these consequences derived from the
pandemic and know how they have resolved it
How have businesses solved the problems
caused by this pandemic?
General purpose
Know the solutions that businesses that have
suffered during this pandemic have taken
through non-experimental research taking into
account a quantitative approach and a
descriptive design to propose adequate strategies
to merchants in Nezahualcóyotl and the
Metropolitan Area.
Specific objectives
Know how businesses have suffered
from the pandemic.
Obtain statistical data on business
impacts
Guide business based on research results
Hypothesis
As of the date that the pandemic was in Mexico,
businesses were closed as of April. Being the
date in which many businesses without having
the knowledge of such magnitude some were
informed, but the great majority of the
population and especially those who do not work
in places that closed continued with normal life.
The solutions that are considered to be carried
out by companies, especially businesses, were
the support of the municipal government such
as: support with cash transfers to businesses that
need to invest to avoid total closure; loans with
subsidized interest rates; tax support for payroll;
deferral of credit payments for businesses that do
not have cash to pay at the moment, giving them
more time to pay off loans. On the other hand,
another of the strategies considered could be the
dissemination of their products through social
networks, especially on Facebook, the number
one advertising network used in businesses and
in the majority of the population in
Nezahualcóyotl and the metropolitan area. In
addition to strategies more directed to the type of
sector that our company is in. as home delivery.
Justification
This research focuses on the businesses in
Nezahualcóyotl and the Metropolitan Area that
were affected by the pandemic in order to help
increase their sales by generating appropriate
strategies in business through orientation
according to the results of the investigation in
order to to contribute with new sales ideas for
businesses to support an economic reactivation
of the place.
19
Article Journal-Macroeconomics and Monetary Economy December, 2020 Vol.4 No.7 16-27
GUTIÉRREZ-ZEPEDA, Martha del Pilar. Solutions and
strategies of Nezahualcoyotl´s business before the pandemic.
RINOE Journal- Macroeconomics and monetary economy. 2020
ISSN-On line: 2524-2040
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SWOT
Figure 1.2 SWOT of local companies
Source of consultation: According to the theoretical
framework investigated
Design of the investigation
This research is with a Quantitative Approach
because it wants to know with the necessary and
concise information to be able to have an answer
to the question of the problem statement. Our
design is developed through non-experimental
Transectional, descriptive research in order to
obtain recent information from statistical data on
the impact that businesses have had in the face
of the pandemic in addition to knowing which
business line is the most affected, taking into
account account of the knowledge of the people
who are having the experience of what has
caused this confinement.
Sampling method
Random Probabilistic Sampling
Develop a probability sampling because not all
businesses will be selected for the investigation
since businesses registered in MyPes are being
taken into account, in order to obtain information
that helps us to know which business is the most
affected to later make proposals or strategies that
help increase sales.
Determination of the universe
To determine the universe, it was necessary to
carry out a documentary investigation where the
total number of businesses that are registered in
MyPES in the municipality of Ciudad
Nezahualcóyotl and the metropolitan area is
known, to calculate the ideal sample for this
investigation, as shown in the following tables:
Business in the Metropolitan Area Neza
Food 216
Pharmacy 108
Grocery stores 133
Miscellany 241
Naturist 45
Internet And Gift Shop 1
Cremeria 34
Rigging 100
Raw Materials 45
Juices 287
Pizza shop 34
Laundry 88
Dry cleaner 59
Cake shop 216
Bakery 50
Tortilleria 38
Stationery 41
Poultry 214
Butcher shop 99
Purifying 33
Stockpile 34
Tlapalería 60
Cell Phone Accessories 14
Washer Repairman 1
Bonnet store 266
Internet 15
Furniture 1
Tatto 20
Aesthetics And Hairdressing 12
Veterinary 258
Billiards 87
Carpentry 93
Plumbing 210
Mechanics 1
Shoe shop 28
Smithy 46
Table 1.1 Nezahualcóyotl Business Number
Source: Pymes.org.mx
STRENGTHS
• Donations they have obtained.
• Worker experience.
• Customer loyalty.
• Marketing relationships
• Good relationship with suppliers.
OPPORTUNITIES
• The use of social networks for business at low cost.
• Association with other companies.
• Good relationship with the nearby population.
THREATS
• Offers from large companies near your businesses.
• The pandemic
• The insecurity
WEAKNESSES.
• Low sales
• Lack of knowledge of how to use social networks for companies.
• Lack of knowledge about Social Networks.
• Low funds to invest.
20
Article Journal-Macroeconomics and Monetary Economy December, 2020 Vol.4 No.7 16-27
GUTIÉRREZ-ZEPEDA, Martha del Pilar. Solutions and
strategies of Nezahualcoyotl´s business before the pandemic.
RINOE Journal- Macroeconomics and monetary economy. 2020
ISSN-On line: 2524-2040
RINOE® All rights reserved.
Business in the Metropolitan Area La Paz
Food 46
Pharmacy 410
Grocery stores 262
Hardware 115
Raw Materials 201
Juices 128
Pizza shop 12
Laundry 95
Dry cleaner 57
Cake shop 81
Bakery 159
Tortilleria 353
Stationery 22
Poultry 425
Butcher shop 245
Purifying 229
Clothing store 88
Stockpile 199
Tlapalería 234
Cell Phone Accessories 27
Internet 256
Miscellany 267
Naturist 37
Cremeria 223
Bonnet store 67
Carpentry 134
Plumbing 22
Mechanical 4
Shoe shop 3
Smithy 191
Tatto 5
Vet 3
Esthetic 2
Furniture 41
Billiards 11
Table 1.2 Number of Businesses in Los Reyes La Paz
Source: Pymes.org.mx
Business in the Metropolitan Area Ixtapaluca
Food 34
Pharmacy 260
Grocery stores 64
Hardware 50
Raw Materials 119
Juices 52
Pizza shop 6
Laundry 75
Dry cleaner 32
Cake shop 31
Bakery 67
Tortilleria 196
Stationery 476
Poultry 244
Butcher shop 151
Purifying 73
Clothing store 47
Stockpile 140
Tlapalería 135
Cell Phone Accessories 4
Internet 145
Miscellany 471
Naturist 17
Cremeria 111
Bonnet store 13
Carpentry 63
Plumbing 10
Mechanical 105
Shoe shop 25
Smithy 94
Tatto 8
Vet 33
Esthetic 0
Furniture 19
Billiards 8
Table 1.3 Number of Businesses in Ixtapaluca
Source: Pymes.org.mx
Business in the Metropolitan Area Texcoco
Food 67
Pharmacy 288
Grocery stores 160
Hardware 28
Raw Materials 75
Juices 90
Pizza shop 11
Laundry 224
Dry cleaner 69
Cake shop 82
Bakery 115
Tortilleria 242
Stationery 651
Poultry 246
Butcher shop 258
Purifying 65
Clothing store 95
Stockpile 173
Tlapalería 136
Cell Phone Accessories 6
Internet 289
Miscellany 363
Naturist 33
Cremeria 96
Bonnet store 42
Carpentry 90
Plumbing 12
Mechanical 162
Shoe shop 145
Smithy 127
Tatto 11
Vet 11
Esthetic 3
Furniture 30
Billiards 6
Table 1.4 Number of Businesses in Texcoco
Source: Pymes.org.mx
According to the total number of
businesses in Nezahualcóyotl and the
Metropolitan Area, there are 9,973 businesses
affected by the covid-1 pandemic equivalent to
the Universe that will be taken as the basis for
our investigation.
21
Article Journal-Macroeconomics and Monetary Economy December, 2020 Vol.4 No.7 16-27
GUTIÉRREZ-ZEPEDA, Martha del Pilar. Solutions and
strategies of Nezahualcoyotl´s business before the pandemic.
RINOE Journal- Macroeconomics and monetary economy. 2020
ISSN-On line: 2524-2040
RINOE® All rights reserved.
Business in the Metropolitan Area Chimahualcan
Food 85
Pharmacy 775
Grocery stores 420
Hardware 385
Raw Materials 376
Juices 234
Pizza shop 22
Laundry 179
Dry cleaner 99
Cake shop 151
Bakery 354
Tortilleria 131
Stationery 445
Poultry 138
Butcher shop 235
Purifying 497
Clothing store 246
Stockpile 219
Tlapalería 598
Cell Phone Accessories 27
Internet 452
Miscellany 387
Naturist 81
Cremeria 549
Bonnet store 133
Carpentry 224
Plumbing 73
Mechanical 3
Shoe shop 241
Smithy 475
Tatto 11
Vet 7
Esthetic 8
Furniture 157
Billiards 31
Table 1.5 Number of Businesses in Chimalhuacán
Business in the Metropolitan Area Chalco
Food 63
Pharmacy 412
Grocery stores 572
Hardware 156
Raw Materials 213
Juices 105
Pizza shop 20
Laundry 125
Dry cleaner 41
Cake shop 89
Bakery 177
Tortilleria 477
Stationery 248
Poultry 460
Butcher shop 368
Purifying 218
Clothing store 88
Stockpile 382
Tlapalería 322
Cell Phone Accessories 17
Internet 216
Miscellany 836
Naturist 34
Cremeria 285
Bonnet store 61
Carpentry 153
Plumbing 28
Mechanical 4
Shoe shop 141
Smithy 270
Tatto 10
Vet 73
Esthetic 6
Furniture 59
Billiards 16
Table 1.6 Number of Businesses Chalco
Sample Selection
The people who will participate in the sample
will be selected, taking into account the
experience they have had with the pandemic.
Sample Calculation
To calculate the sample, the finite general
formula was used, which takes into account less
than 500,000 inhabitants due to the number of
businesses that are within the universe, which is
a total of 9,973. As it's shown in the following:
UNIVERS: 9,973
Formula:
O2 p q N n= E2 (N-1) + O2 p q n = Sample size
o = Confidence level
N = Universe
P = Probability in favor
q = Probability against
e = estimation error
Data
n=?
O= 95% =95/2 =47.5 / 100 = 0.475(1.96)
N= 9973
P= 50%
Q= 50%
E= 0.05
(1.96)2 (.5) (.5) (9973)
n =
3.8416 (.5) (.5) (9973)
(0.05)2 (9973-1) +(1.96)2 (.5) (.5)
n =
0.0025 (9973-1) + 3.8416
22
Article Journal-Macroeconomics and Monetary Economy December, 2020 Vol.4 No.7 16-27
GUTIÉRREZ-ZEPEDA, Martha del Pilar. Solutions and
strategies of Nezahualcoyotl´s business before the pandemic.
RINOE Journal- Macroeconomics and monetary economy. 2020
ISSN-On line: 2524-2040
RINOE® All rights reserved.
9578.06
n =
25.8904
n = 370 polls.
Data collection
Taking into account the results of the general
formula, it is the total of surveys to be carried out
to small businesses in Nezahualcóyotl and the
Metropolitan Area that are registered in MyPes.
This information collection instrument helped us
to obtain the necessary results to solve the
objective of this research, to maintain the
objectivity of the answers these were closed, a
pilot test was also carried out with 10% of our
sample in order to to correctly structure each of
the questions presented in the final
questionnaire.
The information was collected online and
in person at the businesses in Nezahualcóyotl
and the Metropolitan Area by students Bravo
Moreno Mónica Elizabeth & Montoya Vázquez
Jesús Rafael. from the Technological University
of Nezahualcóyotl. The Technological
University of Nezahualcóyotl of the Marketing
Area Business Development career invites you
to take the survey to know the impact that each
business has in the face of the pandemic, this will
help us to carry out strategies so that businesses
can increase their sales.
Municipality where your business is located
a. La paz
b. Ixtapaluca
c. Texcoco
d. Chimalhuacán
e. Chalco
f. Nezahualcóyotl
1. What is the line of your business?
a. Food industry
b. Electronic industry
c. Information technology
d. Other, which one?
2. Have you had any kind of financial
support from the state government?
a. Yes, what is the support received from
the state government?
b. No, Why?
3. Among what percentage do you identify
that your business was affected by the
pandemic?
a. 0% - 40%
b. 41% - 60%
c. 61% - 80%
d. 81% - 100%
4. Do you use social media for your
business?. If your answer was no, please
go to question n° 7
a. Yes
b. No
5. What is the social network you use?
a. Facebook
b. Instagram
c. YouTube
d. Other ¿Which one?
6. By what percentage have sales increased
by uploading the products to social
networks?
a. 5% - 10%
b. 15% - 20%
c. 25% - 30%
d. 35% onwards
7. What has been one of the solutions that
has worked for your business during this
pandemic?
a. Promotions
b. Home delivery of products
c. Discounts
d. Others, which one?
8. Have you had more competition during
this pandemic?
a. Yes
What kind of competition?
b. No
9. How have you been able to pay for your
merchandise?
a. Own means.
b. Bank loans
c. Familiar help
d. Others, which ones?
23
Article Journal-Macroeconomics and Monetary Economy December, 2020 Vol.4 No.7 16-27
GUTIÉRREZ-ZEPEDA, Martha del Pilar. Solutions and
strategies of Nezahualcoyotl´s business before the pandemic.
RINOE Journal- Macroeconomics and monetary economy. 2020
ISSN-On line: 2524-2040
RINOE® All rights reserved.
10. What would you do with your business if
the pandemic continues through 2021?
a. Move on Make the business transfer
b. Close up shop
c. Move on Make the business transfer
d. Others, which ones?
11. Do you know approximately how many
businesses in your locality have closed
during this pandemic?
a. 1 to 5 businesses
b. 6 to 10 businesses
c. 11 to 15 businesses
d. More than 16 businesses
12. What are the means by which you have
learned of the business closures during
this pandemic?
a. Television and radio
b. Newspapers and magazines
c. Internet
d. Others, which ones? ________________
Observations
Chapter II Results
Choices Percentage
La Paz 11%
Ixtapaluca 14%
Texcoco 11%
Chimalhuacán 18%
Chalco 11%
Nezahualcóyotl 35%
Graphic 2.1 Businesses interviewed
Source: Own Authorship
The municipality most interviewed was
in Ciudad Nezahualcóyotl with 35% of all
interviews.
Choices %
a) Food Industry 34%
b) Electrical industry 24%
c) Information technologies 20%
d) Other 22%
Graphic 2.2 Line of business
Source: Own Authorship
According to this graphic representation,
it tells us that most of the businesses are
dedicated to the food industry.
Choices Percentage
a) Yes 8%
b) No 92%
Graphic 2.3 Have you had any kind of financial support
from the state government?
Source: Own Authorship
As shown, only 8% of businesses tell us
that they do have financial support and while
92% of them report that they did not know about
this government program.
La Paz
11%
Ixtapaluca
14%
Texcoco
11%
Chimalhua
cán
18%
Chalco
11%
Nezahualcó
yotl
35%
a) Food
Industry
34%
b) Electrical
industry
24%
c) Information
technologies
20%
d) Other
22%
a) Yes
8%
b) No
92%
24
Article Journal-Macroeconomics and Monetary Economy December, 2020 Vol.4 No.7 16-27
GUTIÉRREZ-ZEPEDA, Martha del Pilar. Solutions and
strategies of Nezahualcoyotl´s business before the pandemic.
RINOE Journal- Macroeconomics and monetary economy. 2020
ISSN-On line: 2524-2040
RINOE® All rights reserved.
Choices Percentage
a)0% - 40% 28%
b)41% - 60% 44%
c)61% - 80% 21%
d)81% - 100% 7%
Graphic 2.4 Among what percentage do you identify that
your business was affected by the pandemic? Source: Own Authorship
As shown in the graph, it tells us that
44% of the businesses consider that between 41
and 60% have been affected by this pandemic.
Choices Percentage
a) Yes 8%
b) No 92%
Graphic 2.5 Have you had any kind of financial support
from the state government?
Source: Own Authorship
As shown in these results, they inform us
that the majority did not know about the aid
programs and some of them did not select them
for these reasons, only 8% of the businesses do
have financial support.
Choices Percentage
a) Yes 53%
b) No 47%
Graphic 2.6 Do you use social media for your business?
Source: Own Authorship
As shown in these results, 53% of
businesses do use social networks, but they only
report on the products, but not in the right places
and they don't talk about their products but about
other stories that are not related to their business.
Choices Percentage
a)5% - 10% 43%
b)15% - 20% 34%
c)25% - 30% 19%
d) 35% onwards 4%
Graphic 2.7 By what percentage have sales increased by
uploading the products to social networks?
Source: Own Authorship
As shown in this Figure, it tells us that
43% of businesses did help them spread their
business on social media by approximately 10%.
a)0% -
40%
28%
b)41% -
60%
44%
c)61% -
80%
21%
d)81% -
100%
7%
a) Si
8%
b) No
92%
a) Si
53%
b) No
47%
a)5% -
10%
43%
b)15% - 20%
34%
c)25% -
30%
19%
d) 35% onwards
4%
25
Article Journal-Macroeconomics and Monetary Economy December, 2020 Vol.4 No.7 16-27
GUTIÉRREZ-ZEPEDA, Martha del Pilar. Solutions and
strategies of Nezahualcoyotl´s business before the pandemic.
RINOE Journal- Macroeconomics and monetary economy. 2020
ISSN-On line: 2524-2040
RINOE® All rights reserved.
Choices Percentage
a) Promotions 34%
b) Home delivery 45%
c) Discounts 20%
d) Other 1%
Graphic 2.8 What has been one of the solutions that has
worked for your business during this pandemic?
Source: Own Authorship
One of the most important strategies that
have helped to improve sales are home deliveries
by 45% and, secondly, sales promotions.
Choices Percentage
a) Yes 82%
b) No 18%
Graphic 2.9 Have you had more competition during this
pandemic?
Source: Own Authorship
As the results show, 82% of the
businesses in Nezahualcóyotl and the
metropolitan area have had more competition
than in other times.
Choices Percentage
a) Own media 41%
b) Bank loans 20%
c) Family help 29%
d) Other 10%
Graphic 2.10 How have you been able to pay for your
merchandise?
Source: Own Authorship
As shown, 41% of merchants have paid
their own expenses, while 29% say that their
relatives help them.
Choices Percentage
a) keep going 42%
b) Close the deal 35%
c) Make transfer 23%
d) Other 0%
Graphic 2.11 What would you do with your business if
the pandemic continues through 2021?
Source: Own Authorship
As shown in this representation, 42% say
they will go ahead but a significant 35% say they
will close the business.
a)
Promotions
34%
b) Home
delivery
45%
c)
Discounts
20%
d) Other
1%
a) Si
82%
b) No
18%
a) Own media
41%
b) Bank loans
20%
c) Family help
29%
d) Other
10%
keep
going
42%
b) Close
the deal
35%
c) Make
transfer
23%
d) Other
0%
26
Article Journal-Macroeconomics and Monetary Economy December, 2020 Vol.4 No.7 16-27
GUTIÉRREZ-ZEPEDA, Martha del Pilar. Solutions and
strategies of Nezahualcoyotl´s business before the pandemic.
RINOE Journal- Macroeconomics and monetary economy. 2020
ISSN-On line: 2524-2040
RINOE® All rights reserved.
Choices %
a) 1 - 5 businesses 35%
b) 6 - 10 businesses 33%
c) 11 - 15 businesses 24%
d) More than 16 businesses 8%
Graphic 2.12 Do you know about how many businesses
in your area have closed during this pandemic?
Source: Own Authorship
As shown in the results, 35% of the
merchants tell us that between 1 to 5 businesses
have closed, depending on the businesses that
are in the locality due to the confinement.
Choices Percentage
a) Television and Radio 48%
b) Newspapers and Magazines 21%
c) Internet 28%
d) Other 3%
Graphic 2.13 What are the means by which you
have learned of business closures during this
pandemic?
Source: Own Authorship
As shown in these results, 48% of
merchants tell us that they have learned more
from radio and television than from social
networks.
Chapter III Conclusions and proposals
According to the results obtained, we can
conclude the following:
The problems that have caused during
this pandemic in the first place is the economic
one derived from unemployment or decrease in
wages, 42% of merchants report that they
continue to move forward but that if the
pandemic continues in the following year,
unfortunately they will also close. Therefore, it
is necessary to generate sales strategies that help
them increase these through advertising in the
most important social network in this area
(Facebook) but generating marketing content
(content that is related to the products that are
sold but at the same time that they help the target
audience and only in the locality) Another sales
strategy can be home delivery, informing the
delivery method through the same social
network, informing the forms of sanitation
security in the products delivered.
The Secretary of Economic
Development offers courses for the growth of
their businesses such as The Secretary of
Development Economico offers a course for the
growth of its businesses such as the Official
Online Store "Everything I find in CDMX" It
offers preferential conditions to the MIPyMES
of Mexico City for the commercialization of
their products and services through an official
online store in Mercado Libre to reach more
consumers and strengthen the local economy.
This can be seen at the following URLs.
https://www.sedeco.cdmx.gob.mx/convocatoria
s/cursos
"Financial support for family micro-
businesses, Credit to the word" are for
businesses that have been working for more than
6 months and have to register in the welfare
census, see credito_a_la_palabra (www.gob.mx)
In general, these strategies will help the
businesses that are in the investigated area, but
as long as the small businesses are willing to
change the way they market their products and
spread them.
a) 1 - 5
businesses
35%
b) 6 - 10 businesses
33%
c) 11 - 15
businesses
24%
d) More than
16 businesses
8%
a) Television
and Radio
48%
b)
Newspaper
s and
Magazines
21%
c) Internet
28%
d) Other
3%
27
Article Journal-Macroeconomics and Monetary Economy December, 2020 Vol.4 No.7 16-27
GUTIÉRREZ-ZEPEDA, Martha del Pilar. Solutions and
strategies of Nezahualcoyotl´s business before the pandemic.
RINOE Journal- Macroeconomics and monetary economy. 2020
ISSN-On line: 2524-2040
RINOE® All rights reserved.
Acknowledgments
This article arose due to the concern that exists
during this confinement because in Ciudad
Nezahualcóyotl according to the press release of
the Government of the Municipality it tells us
that they offer more than 10,000 businesses such
as restaurants, cheap kitchens, inns and other
similar businesses (Bulletin Press, 2020) Due to
the above, there was a growing concern to know
what are the problems that businesses faced
during this pandemic and what may happen if we
do not guide them to continue working in a
different way so that they can move forward.
Therefore, we are grateful for the
participation of the students Mónica Elizabeth
Bravo Moreno and Jesús Rafael Montoya
Vázquez, students of the Technological
University of Nezahualcóyotl for their support in
the collection of information, as well as the
Institution. Also for the participation of the
businesses that provided their responses, which
also commented that the pandemic has affected
them a lot and that they appreciated that this
study has been carried out because if they are
very interested in generating strategies that they
can implement without investing much so that
can move on.
References
Dinero.com (2018) Habilitan registro en línea
para PyMES recuperado en dinero.com.sv -
Habilitan registro en línea para MYPES
Gobierno Municipal Nezahualcóyotl (2020)
Boletin de prensa Recuperado en H.
Ayuntamiento de Nezahualcóyotl
Hernández Sampieri R; Fernández C. & Baptista
P. (2014) Metodología de la investigación
Metodología de la investigación - Sexta Edición
(uca.ac.cr)
INEGI (2020) Encuesta sobre el Impacto
Económico Generado por COVID-19 en las
Empresas (ECOVID-IE) Recuperado en
Encuesta sobre el Impacto Económico Generado
por COVID-19 en las Empresas (ECOVID-IE)
2020 (inegi.org.mx)
Pymes.org.mx (2020) El directorio de
MiPyMEs, PyMEs y Empresas + Grande de
México Recuperado en PyMES.org.mx el
directorio de MiPyMES, PyMEs y empresas más
grande de México
Secretaría de Salud (14/08/2020) Lineamiento
para la estimación de riesgos del semáforo por
regiones COVID-19, Microsoft Word -
Metodo_semaforo_COVID_14Agosto2020_19
h00.docx (coronavirus.gob.mx)
Wang, W., Tang, J., & Wei, F. (2020). Updated
understanding of the outbreak of 2019 novel
coronavirus (2019‐nCoV) in Wuhan, China.
Journal of Medical Virology.[ Internet] 2020
[citado 19 mar 2020] 20 (3). Disponible en: URL
doi:10.1002/jmv.25689
28
Article Journal-Macroeconomics and Monetary Economy December, 2020 Vol.4 No.7 28-42
Covid-19, economic activity and formal employment. A look at the effects of the
pandemic in México and Nayarit, 2020
Covid-19, actividad económica y empleo formal. Una mirada a los efectos de la
pandemia en México y Nayarit, 2020
MENDOZA-ALVARADO, Juan José*†, ROBLES-ZEPEDA, Francisco Javier and SÁNCHEZ-
GÓMEZ, Sara Alejandra
Universidad Autónoma de Nayarit, Unidad Académica de Economía
ID 1st Author: Juan José, Mendoza-Alvarado / ORC ID: 0000-0002-1129-6981, CVU CONACYT ID: 72532
ID 1st Coauthor: Francisco Javier, Robles-Zepeda / ORC ID: 0000-0003-1306-265X
ID 2nd Coauthor: Sara Alejandra, Sánchez-Gómez
DOI: 10.35429/JMME.2020.7.4.28.42 Received August 25, 2020; Accepted December 14, 2020
Abstract
The objective of this writing is to document the
effects of Covid-19 on economic activity and
employment in Mexico and Nayarit. Economic
Science, through macroeconomic analysis, offers an
explanatory framework in relation to the proposed
object of study: Neoclassical and Post-Keynesian
theories precepts are reviewed. Due to its effects in
Mexico and Nayarit, we are facing one of the deepest
economic and labor crises in our economic history.
There is a -21.6% drop in production in Mexico in
May and a drop of -23.1% in the case of Nayarit in
the second quarter of 2020. In relation to formal
employment, a loss of 925,490 jobs are recorded as
of July for Mexico as a whole and 17,181 jobs for
Nayarit as of April 2020.
Covid-19, Supply shock, Economic Activity,
Formal employment
Resumen
El objetivo del presente escrito consiste en
documentar los efectos del Covid-19 sobre la
actividad económica y el empleo en México y en
Nayarit. La Ciencia Económica, a través del análisis
macroeconómico ofrece un marco explicativo en
relación con el objeto de estudio propuesto; se pasan
revista a los preceptos de la teoría neoclásica y de la
teoría post-keynesiana. Por sus efectos en México y
en Nayarit, estamos frente a una de las crisis
económicas y laborales más profundas de nuestra
historia económica. Se contabilizan una caída de -
21.6% de la producción en México en el mes de
mayo y una de -23.1% para el caso de Nayarit en el
segundo trimestre de 2020. En relación con el empleo
formal, se contabilizan una pérdida de 925,490
empleos al mes de julio para México en su conjunto
y de 17,181 empleos para Nayarit al mes de abril de
2020.
Covid-19, Choque de oferta, Actividad
Económica, Empleo formal
Citation: MENDOZA-ALVARADO, Juan José, ROBLES-ZEPEDA, Francisco Javier and SÁNCHEZ-GÓMEZ, Sara
Alejandra. Covid-19, economic activity and formal employment. A look at the effects of the pandemic in México and Nayarit,
2020. RINOE Journal-Macroeconomics and monetary economy. 2020. 4-7: 28-42
* Correspondence to Author (email: jmendoza@uan.edu.mx)
† Researcher contributing first author.
© RINOE Journal – Taiwan www.rinoe.org/taiwan
29
Article Journal-Macroeconomics and Monetary Economy December, 2020 Vol.4 No.7 28-42
MENDOZA-ALVARADO, Juan José, ROBLES-ZEPEDA, Francisco Javier and SÁNCHEZ-GÓMEZ, Sara Alejandra. Covid-19, economic
activity and formal employment. A look at the effects of the pandemic in
México and Nayarit, 2020. RINOE Journal-Macroeconomics and
monetary economy. 2020
ISSN-On line: 2524-2040
RINOE® All rights reserved.
Introduction
The world faces, from December 2019 to the
present day, a multi-dimensional shock resulting
from the outbreak of the SARS-CoV2 virus
popularly known as COVID-19 or coronavirus.
The effects of this shock also affect the world of
production, distribution and circulation of goods
and services in the world (extraction and
consumption of gasoline and gas, commerce,
transport, tourism, hotels, food preparation, etc.)
as areas of human interaction (education, health,
sports, nightlife, social events -birthdays,
baptisms, weddings and funerals-, sports
competitions -suspension of attendance at the
stadiums of the professional foot-ball leagues,
the NBA, American leagues and national base-
ball, professional box, etc.-), that the increase in
uncertainty and risk associated with the
functioning of financial markets, transition to
new forms of labor relationship such as work at
home and increase in family violence. A true
revolution, of human interaction in the world of
production and of social interaction in the world.
Two of the strongest negative effects of
the measures of distancing and suspension of
non-essential activities - designed to contain the
pandemic - have been the fall in economic
activity and employment. The objective of this
document is to document the effects of Covid-19
on economic activity and formal employment in
Mexico and Nayarit.
Economic Science, through
macroeconomic analysis, offers an explanatory
framework in relation to the phenomenon we are
currently experiencing. This explanatory
framework is not unique or homogeneous, rather
it is diverse and not singular. For the neoclassical
theory, for example, in relation to temporary
changes in the production function, according to
Barro (1986) “we can think of the bad weather
that reduces coffee production in Brazil or the
political problems that reduce agricultural
production in Poland. Recently, this type of
alteration has been called 'supply shocks' ”.
From this perspective, natural disasters such as
earthquakes, tsunami, droughts, floods,
pandemics, etc. they constitute supply shocks
that have a negative impact on the production
function, contracting the supply of goods and
people's wealth.
In Barro's perspective, the decrease in
wealth and consumption resulting from a
negative supply shock would have a positive
effect on labor effort, however, the latter would
be less than the total negative effect on the
supply of goods. Also, in this same perspective,
said “supply shocks” have an unpredictable,
casuistic or random character.
On the other hand, from a Post-
Keynesian perspective, according to Ken-
Benedict (2020) “actions to stop the spread of
the new coronavirus COVID-19 are drastically
reducing economic activity, leaving people
without work, exerting pressure significant on
companies and threatens a deep recession ".
Unlike the neoclassical perspective, post-
Keynesian thinking emphasizes the negative
effects that pandemic containment measures
have on demand, as well as the fact that the
spread of the disease around the world is
disrupting global supply chains.
Notwithstanding the difference in the
emphasis that the schools of economic thought
place on the supply or demand aspects, it is clear
that the pandemic and the associated measures to
confront it: social distancing and suspension of
non-essential activities, affect the goods market
both on the supply and demand sides, as well as
the labor market. Documenting the relationship
between the variables previously described in
Mexico and Nayarit is the purpose of this work.
Its implications in terms of public policy to
safeguard the productive apparatus (Micro,
small and medium enterprises) and employment
are essential to preserve the well-being of
Mexicans.
The first section presents a brief review
of the relevant literature in relation to Covid-19,
economic activity and formal employment.
Next, the basic data of the pandemic in the world
and between states in Mexico are documented.
With this last action the state of Nayarit is visible
in the world context. Likewise, the behavior of
the global indicator of economic activity in
Mexico is reviewed at a sectoral level, detecting
the existence of endogenous processes of
disinvestment and medium-term decrease
existing prior to the public health crisis that,
when combined, have resulted to an economic
and employment crisis greater than the
economic-financial crisis of 2009 and only
comparable to that of 1929-1932 of the 20th
century.
30
Article Journal-Macroeconomics and Monetary Economy December, 2020 Vol.4 No.7 28-42
MENDOZA-ALVARADO, Juan José, ROBLES-ZEPEDA, Francisco Javier and SÁNCHEZ-GÓMEZ, Sara Alejandra. Covid-19, economic
activity and formal employment. A look at the effects of the pandemic in
México and Nayarit, 2020. RINOE Journal-Macroeconomics and
monetary economy. 2020
ISSN-On line: 2524-2040
RINOE® All rights reserved.
Finally, a section is presented where the
indicators available for the analysis of the 2020
situation of the economy and formal
employment in Nayarit are reviewed.
I. Review of relevant literature
Over the course of 2020, a large number of
studies have been published in relation to
COVID-19 and the Economy. It is out of the
scope of this research to review in its extension
said literature which addresses from the design
of optimal mitigation policies (Acemoglu,
Chernozukov, Werning and Winston, 2020) to
the impact of COVID-19 on gender equality
(Alon, Doepke, Olmstead-Rumsey and Tertilt,
2020). Instead, it is proposed to highlight a group
of works that from a macroeconomic perspective
highlight the effects of the pandemic on
economic activity and employment.
The dominant body of economic thought
in the Western world during the 1940-1970
period was strongly influenced by
Keynesianism. This school of analysis, as a
result of the crisis of 1929-1932, identified the
insufficiency of effective demand as an
important element to explain the fluctuations of
the business cycle. In this perspective, economic
policy actions through government action
constitute a possibility to influence the behavior
of economic and financial activity.
Shapiro (1987) argues that “following
Keynes, much of the macroeconomic analysis
neglected the role of the supply side. In periods
when supply shocks are minimal, doing so
provides an adequate, if incomplete,
understanding of economic fluctuations. The
emphasis on effective demand was inadequate
for forecasting, analyzing and prescribing
policies in the face of supply shocks in the 1970s
”. During the 1970s, the emphasis on economic
analysis would shift towards the importance of
supply aspects in the behavior of the cycle and
economic growth.
Paraphrasing Solow (1980), one must
ask: what made the 1970s so different from other
years?
After two years in which the consumer
price index (CPI) rose at an annual rate of 3.4%,
it jumped to 8.8% in the four quarters of 1973.
Much of that reflected the increase in food
prices; the non-food commodity component of
the CPI increased by only 5% in 1973, but even
that was double the 1972 rate. The food
component of the CPI, which had risen 4.7% in
1972, rose by 20, 1% in the four quarters of 1973
(Solow, 1980, p. 250).
Additionally, in relation to one of the
most significant events for the world economy in
1974: the increase in oil prices, which
conventional economic theory characterizes as
an exogenous supply shock, Solow adds:
To get to the point, the conventional
wisdom about 1974 seems perfectly acceptable.
The economy was affected by a series of shocks,
each of which could be seen as generating an
upward increase in the domestic price level.
Major shocks included the rise in oil prices by
OPEC, the lagged effects of the depreciation of
the dollar in 1971 and 1973, the fall in price and
wage controls in 1974, and the global boom in
oil prices. non-fuel minerals that began as the
effect of an unusually synchronized rise in global
demand in an industry with short-term inelastic
supply and turned into a speculative boom. To
these four shocks we can add, as already
mentioned, the sharp increase in agricultural
prices starting in 1973 and continuing until
1974, caused partly by crop shortages in the US
and partly by strong demand, part of which was
due in turn to poor harvests abroad (Ibid. p.
251).
Solow himself considers that "it is an
abuse to describe all these events as supply
shocks" because although some of them
obviously are, such as the increase in the price of
oil, the increase in import prices induced by
depreciation and the grain shortage due to
increased food prices; clearly there were
elements on the demand side in the cases of food
and non-fuel raw materials.
Further, the 1970s also witnessed a
dramatic slowdown in the rate of productivity
growth in industrialized nations. Measured by
real per capita gross national product,
productivity in the US grew at 2.8% per year
between 1964 and 1973.
31
Article Journal-Macroeconomics and Monetary Economy December, 2020 Vol.4 No.7 28-42
MENDOZA-ALVARADO, Juan José, ROBLES-ZEPEDA, Francisco Javier and SÁNCHEZ-GÓMEZ, Sara Alejandra. Covid-19, economic
activity and formal employment. A look at the effects of the pandemic in
México and Nayarit, 2020. RINOE Journal-Macroeconomics and
monetary economy. 2020
ISSN-On line: 2524-2040
RINOE® All rights reserved.
In the countries of the European
Organization for Economic Cooperation and
Development (OECD) it grew by 3.7% during
the same period. From 1973 to 1981, these rates
fell to 1.3 percent in the United States and 1.5
percent in Europe (Shapiro, 1987, p. 6).
These two circumstances briefly
described: supply shocks and a drop in
productivity, among others, would lead to a shift
in the emphasis of economic analysis; If from
1940 to 1970 this emphasis was focused on the
aspects of demand, the subsequent years would
see an extraordinary recovery on the importance
of supply for economic analysis and secondarily
on demand1.
I.1 The Neoclassical Macroeconomics of
Epidemics: supply shocks and individual
decisions
Barro (1986) in his text on Macroeconomics
proposes: consider a displacement of the
production function that lasts only the current
period.
We can think of the bad weather that
reduces coffee production in Brazil or the
political problems that depress agricultural
production in Poland. Recently, these types of
changes have been called “supply shocks”. For
some reason, the term does not always apply to
an adverse shock to the supply of goods.
However, there may be a bountiful harvest or a
streak of good luck in labor relations (p. 128).
In Barro's perspective, we can find a wide
range of situations that we could qualify as
supply shocks. From natural disasters,
epidemiological, political conflicts, etc. which
would be examples of triggering situations for
supply shocks. In this sense, consider a purely
parallel downward shift in the production
function, for example, the result of a negative
supply shock. Since this movement does not
alter the slope of the production function –the
marginal productivity curve of labor-, there are
no substitution effects on the relative costs of
consumption and leisure in the intertemporal
utility function of individuals.
1 The economic-financial crisis of 2008-2009 has revealed the
existing economic and social weaknesses in the current world
order; the second decade of the 21st century has seen the rebirth
of studies related to the problems inherent to poverty, social
polarization, inequality and their importance in determining the
behavior of effective demand.
One effect of the supply shock is that
production decreases for a given level of labor
effort. Decreased production reduces wealth.
However, because the change is short-lived, the
wealth effects will be small. Therefore, says
Barro:
“we find a small negative response from
aggregate consumer demand and a small
positive response from aggregate labor effort.
The increase in work implies an increase in the
goods offered. However, since the wealth effect
is weak, this increase only offsets a small part of
the initial reduction in supply. Thus, there is a
net decrease in aggregate supply, which exceeds
the small reduction in aggregate demand ”(Ibid.
P. 129).
Thus, Barro very clearly identifies a
result derived from the presence of a negative
supply shock: the drop in production. The
treatment given by Barro to supply shocks and
the decisions of individuals do not imply a
generalization that coherently covers the
specificities inherent in the consequences of a
negative supply shock derived from an epidemic
in the neoclassical perspective. More recent
theoretical developments in this school of
thought such as that of Eichenbaum et. to the.
(2020) state:
In our model, an epidemic has effects on
both aggregate demand and aggregate supply.
The effect on supply arises, because the epidemic
exposes the people who are working to the virus.
People react to this risk by reducing their labor
supply. The demand effect arises because the
epidemic exposes people who buy consumer
goods to the virus. People react to this risk by
reducing their consumption. The effects of
supply and demand work together to generate a
large and persistent recession.
The work of Eichenbaum, Rebelo and
Trabandt constitutes an extension of the
canonical model called Susceptible, Infected and
Recovered-Removed by its acronym: SIR
model, proposed at the beginning of the 20th
century by Kermack and McKendrick (1927)
and constructed to explain the resulting
equilibrium of the interaction between economic
decisions and the dynamics of an epidemic.
32
Article Journal-Macroeconomics and Monetary Economy December, 2020 Vol.4 No.7 28-42
MENDOZA-ALVARADO, Juan José, ROBLES-ZEPEDA, Francisco Javier and SÁNCHEZ-GÓMEZ, Sara Alejandra. Covid-19, economic
activity and formal employment. A look at the effects of the pandemic in
México and Nayarit, 2020. RINOE Journal-Macroeconomics and
monetary economy. 2020
ISSN-On line: 2524-2040
RINOE® All rights reserved.
The SIR model developed by
Eichenbaum et al, unlike that of Kermack and
MaKendrick, considers the probabilities of
transition between health states as endogenous,
that is, they assume that the decisions of
individuals resulting from the need to buy
consumer goods and to work to generate
purchasing power increases the chances of the
infection spreading. These decisions exacerbate
the depth of the recession caused by the
epidemic. The resulting situation is not socially
optimal because infected people do not
internalize and do not take full responsibility for
the consequences of their economic decisions for
the spread of the virus. In this model, the
simplest measure to contain the pandemic
increases the severity of the recession, but saves
approximately half a million lives in the case of
the United States.
This brief review of neoclassical
economic thought shows the existing
conceptualization of the economic nature of a
pandemic: it is an exogenous shock to the world
economy with negative consequences on
people's lives, economic activity and
employment; The resulting trade-off between
measures for social containment of the pandemic
and preservation of human lives does not
constitute a social optimum, and temporary
health measures for containing the pandemic
amplify the depth of the recession.
1.2 Post-Keynesian Macroeconomics:
Pandemics and the Utilization of Economic
Capacity
According to Lavoie (2006), as its name implies,
post-Keynesians find their main inspiration in
the work of John Maynard Keynes (The general
theory of employment, interest and money), the
famous British economist from the University of
Cambridge. However, modern post-Keynesians
are not limited to Keynes. They are also inspired
by the work of those who were close to Keynes
at the time he wrote the General Theory at
Cambridge - such as Roy Harrod and Joan
Robinson - and by those who were involved in
creating the so-called "Cambridge school" in the
fifties and sixties. Among these economists we
find Nicolas Kaldor, Michal Kalecki and Piero
Sraffa. For Serrano (2006) this school of thought
has as its central axis the principle of effective
demand.
Placing this principle at the center of the
analysis means accepting that in market
economies there is a shortage of demand rather
than a shortage of supply, without this
necessarily meaning that modern market
economies cannot cope with supply problems.
Regarding the effects of a pandemic on
economic activity and employment, from a post-
Keynesian perspective, Ken-Benedict (2020)
argues that actions to stop the spread of the new
coronavirus COVID-19 are drastically reducing
economic activity, which that puts people out of
work, puts significant pressure on companies
and threatens a deep recession. In this
perspective, the line of causality of the pandemic
shifts from the measures of confinement and
suspension of non-essential activities to a fall in
effective demand (from the point of view of a
company considered "non-essential", requiring
that the company close your consumer-oriented
outlets is more akin to a demand withdrawal for
your goods or services than a voluntary labor
withdrawal). Even without an order, public
health messages encourage people to stay home
as much as possible, which is directly
experienced as a loss of demand.
At least in the US, when faced with rent
payments and expenses for food, utilities and
other necessities, many people do not have the
option of retiring from their job. The cost of
necessities is not small. For the US population
as a whole, total housing, food at home, utilities,
health insurance, and medications accounted for
39% of spending in 2018. For the fifth of the
surveyed population with higher incomes low,
those categories accounted for half of spending.
Under a shelter-at-home order, households will
likely see that share increase as they spend more
on food and utilities, while they cannot easily cut
spending on rent, health insurance or medicine.
Without sufficient income, they must cut other
expenses, including necessities like clothing. If
they cannot negotiate a reduction or
postponement of rent payments, they may face
eviction (Ibid., P. 3)
Randrup, Olesen and Madsen (2020)
consider that the global pandemic related to the
COVID-19 virus and the consequent contraction
in economic activity have currently led the world
to a stalemate in 2020, with the prospect of a
prolonged and severe recession in the future.
33
Article Journal-Macroeconomics and Monetary Economy December, 2020 Vol.4 No.7 28-42
MENDOZA-ALVARADO, Juan José, ROBLES-ZEPEDA, Francisco Javier and SÁNCHEZ-GÓMEZ, Sara Alejandra. Covid-19, economic
activity and formal employment. A look at the effects of the pandemic in
México and Nayarit, 2020. RINOE Journal-Macroeconomics and
monetary economy. 2020
ISSN-On line: 2524-2040
RINOE® All rights reserved.
The exact magnitude of this impact on
the world economy is, of course, uncertain, as is
the duration of the current recession. However,
many fear that the drop in the level of world
GDP will be significant. In fact, probably on a
similar scale if not worse than in the early years
of the Great Recession.
Papadimitriou, Sezza F. and Zezza G.
(2020) document the effects of the pandemic on
economic activity in Italy and compare it with a
group of countries, on which they state:
Although European countries did not act
simultaneously, and at times followed different
strategies, the impact of the epidemic was
similar. If Italy had the largest drop in real GDP
in 2020 / Q1, other countries were even more
affected in the second quarter of 2020. In any
case, the size of the economic shock is
unprecedented (p. 4).
Additionally, in relation to the exogenous
nature of the pandemic, a characterization
supported by neoclassical theory, Keen (2020)
affirms that the coronavirus is the result of
excessive human pressure on the biosphere, and
that the effects of the pandemic it has caused in
the world have been aggravated by policy
recommendations derived from conventional
economic thought. In Keen's perspective, the
current pandemic is not an exogenous variable to
the world economic system created by the mind
and hand of man, but the result of a way of
relating to man with planet earth and its
resources, in a way to create and consume
satisfiers that have led to a predatory action of
man on nature.
II. Methodology
II.1 Method
It is a quantitative research, with an exploratory
scope, as it studies an ongoing phenomenon on
which there are no previous studies in relation to
the local dimension - read federal entity:
Nayarit-; In this sense, it is a pioneering work
that aims to contrast the local reality with the
national reality. Additionally, it must be said that
the proposed object is investigated from a
macroeconomic perspective, incorporating the
basic elements of the relevant theoretical debate
in relation to the pandemic.
Space is opened to study the relationship
between pandemic-economic activity-
employment in an innovative way based on the
elements provided by basic statistics. In this
sense, it is intended to provide cognitive
elements that allow a better understanding of the
relationship between the proposed variables. The
approach presented establishes the bases for
subsequent studies that address the problem of
causality between economic activity and
employment, a central problem that remains in
the macroeconomic debate exposed in the
literary review. This study lays the foundations
for, in another space, elucidating the exchange
between economic losses (unemployment) and
public policy actions (health and government
management) among the states in our country.
II.2 Databases
The following databases have been used to
explore the pandemic-economic activity-formal
employment relationship: for information
related to the number of infected and deaths in
the world, data from the World Health
Organization (WHO) are used . Graphs and
tables on the daily evolution of the pandemic in
the world are presented, organized by region and
by country. In the case of the pandemic data on
federal entities, the official data provided by the
Government of the Republic through the
Ministry of Health is used.
Data on economic activity are
documented with the Global Indicator of
Economic Activity (IGAE) in Mexico, which
allows us to know and monitor the behavior of
the real sector of the economy in the short term;
and in the case of Nayarit, the Quarterly
Indicator of Economic Activity (ITAE) is used,
both reported by INEGI. To identify the global
dynamics of labor activity in Mexico, the Global
Index of Employed Personnel in Economic
Sectors (IGPOSE) is used.
This indicator has been constructed
based on the 2014 Economic Censuses (data
from 2013) and is provided by INEGI. The
information related to formal employment in
Mexico was obtained from the Ministry of Labor
and Social Security (STPS) and those of Nayarit
from the Mexican Institute of Social Security
(IMSS).
34
Article Journal-Macroeconomics and Monetary Economy December, 2020 Vol.4 No.7 28-42
MENDOZA-ALVARADO, Juan José, ROBLES-ZEPEDA, Francisco Javier and SÁNCHEZ-GÓMEZ, Sara Alejandra. Covid-19, economic
activity and formal employment. A look at the effects of the pandemic in
México and Nayarit, 2020. RINOE Journal-Macroeconomics and
monetary economy. 2020
ISSN-On line: 2524-2040
RINOE® All rights reserved.
The graphing of the mentioned time
series shows the effects of the pandemic on
people's lives, economic activity and formal
employment. The data related to economic
activity and formal employment for the Mexican
economy and Nayarit are put into a growth rate
format, which allows comparing the current
crisis with other moments in time such as the
economic-financial crisis of 2008-2009.
III. Results
III.1 Spatial dimension of Covid-19 in the
world, Mexico and Nayarit
On December 31, 2019, the World Health
Organization (WHO) received reports of the
presence of pneumonia, of unknown origin, in
the city of Wuhan, China; On January 4, 2020,
said organization would officially register the
first case of infection by SARS-CoV-2, the virus
that causes the disease known as Covid-19 and
that currently plagues the entire world.
Figure 1 Number of Covid-19 patients by regions in the
world, December 29, 2020, WHO
Source: https://covid19.who.int/
Figure 1 shows the dynamics of spatial
contagion in the number of Covid-19 patients in
the different regions that make up our planet.
Four moments describe the spread of the virus:
the first, is the moment of the epidemic outbreak
- located in the graph on January 4 -, the moment
in which the health authorities in China
communicate to the World Health Organization
that they face a new disease caused by a new
virus where the highest number of infected are
located in that country and a few in Korea and
Japan. The second moment is located two
months later; On March 4, 2020, the virus has
moved its vortex to Europe, notably Spain and
Italy, and cases are beginning to be detected in
England and France.
Europe is the new epicenter of global
contagion but there are already cases detected in
all regions of the world: the pandemic is a reality
and a threat to most of the public health systems
in the world, which, it is recognized, is not
recognized. They are prepared to face a
pandemic of such magnitudes.
In the third moment, from April to the
end of September, the central focus of contagion
shifts to the American continent, making visible
from June also very importantly, the Southeast
Asian region made up of countries such as India,
Bangladesh, Indonesia, Nepal, Thailand, Sri-
Lanka, etc. The fourth moment begins in
October and continues to this day with a
regrowth in Europe and the Americas region,
which is seen much more clearly in Figure 2 on
the number of deaths.
By far, the American continent has
contributed the highest share in absolute and
relative terms relative to the rest of the world:
34,836,259 patients in the Americas versus only
1,072,314 in the western Pacific region (China,
Japan, Korea, Bangladesh, etc.), (WHO,
December 29, 2020; in relative terms per million
inhabitants, the United States has a contagion
rate of 58,449 against 66 in China (WHO,
December 31, 2020).
In relation to the number of deaths by
regions in the world, once again the Americas
region accounts for the highest number of deaths
from Covid-19, these being a total of 845,385
against only 19, 774 deaths in the Pacific region
of the west (WHO, December 29, 2020). In
relative terms per million inhabitants, the United
States has a rate of 1,014 deaths against 3 in
China (WHO, December 31, 2020). In relation
to this indicator, the regrowth that started in
Europe in early November, continued in
December and is expected to persist with the
December Christmas festivities and the presence
of the effects of seasonal influenza is highly
worrying (see Figure 2).
0
10,000,000
20,000,000
30,000,000
40,000,000
50,000,000
60,000,000
70,000,000
80,000,000
90,000,000
03/0
1/2
020
17/0
1/2
020
31/0
1/2
020
14/0
2/2
020
28/0
2/2
020
13/0
3/2
020
27/0
3/2
020
10/0
4/2
020
24/0
4/2
020
08/0
5/2
020
22/0
5/2
020
05/0
6/2
020
19/0
6/2
020
03/0
7/2
020
17/0
7/2
020
31/0
7/2
020
14/0
8/2
020
28/0
8/2
020
11/0
9/2
020
25/0
9/2
020
09/1
0/2
020
23/1
0/2
020
06/1
1/2
020
20/1
1/2
020
04/1
2/2
020
18/1
2/2
020
Cases
AMERICAS
EUROPE
SOUTH EAST ASIA
EASTERN MEDITERRANEAN
AFRICA
WESTERN PACIFIC
35
Article Journal-Macroeconomics and Monetary Economy December, 2020 Vol.4 No.7 28-42
MENDOZA-ALVARADO, Juan José, ROBLES-ZEPEDA, Francisco Javier and SÁNCHEZ-GÓMEZ, Sara Alejandra. Covid-19, economic
activity and formal employment. A look at the effects of the pandemic in
México and Nayarit, 2020. RINOE Journal-Macroeconomics and
monetary economy. 2020
ISSN-On line: 2524-2040
RINOE® All rights reserved.
Figure 2 Number of deaths from Covid-19 by region in
the world, December 29, 2020, WHO
Source: https://covid19.who.int/
The importance of relativizing the
absolute data generated by the present pandemic
is an issue of the greatest importance since the
media tend to overestimate the value of the data
in absolute terms, sometimes deforming the real
dimension of the public health problem.
In this sense, in absolute numbers, as can
be seen in the left side of Figure three, Mexico
occupies the position number twelve in the
world with 1,383,434 patients and number four
with 122,426 deaths, a situation that is observed
on the right side of the same Figure (WHO,
December 29, 2020); On the other hand, in terms
of population, Mexico ranks 62nd for
accumulated Covid-19 cases and 12th for deaths
when said data per million inhabitants are
relativized (WHO, August 24, 2020).
Figure 3 Sick and deaths from Covid-19 by country;
WHO, December 29, 2020
Source: https://covid19.who.int/table
In relation to the behavior of the spread
of the virus in the states that make up the
Mexican Republic, as can be seen in Figure 4,
this differentiation allows us to observe that in
absolute terms the states with the highest
incidence of Covid-19 patients are: Federal
District, State of Mexico, Guanajuato, Tabasco,
Veracruz, Nuevo León, Puebla, Tamaulipas and
Sonora; while those with the lowest incidence
are: Colima, Zacatecas, Nayarit, Morelos and
Aguascalientes.
Figure 4 Covid-19 patients by federal entity in Mexico as
of August 22, 2020, accumulated cases
Source: Mexico´s Government
In relative terms, that is, the total number
of patients in relation to the total population, the
first five places are Tabasco, Federal District,
Baja California Sur, Sonora and Tamaulipas.
The last five places for the same indicator are
Chiapas, Chihuahua, Jalisco, Morelos and
Querétaro. In this area, Nayarit is located in
position number 20, a situation that can be seen
in Figure five.
Figure 5 Deaths in relation to the total population by
federal entity in Mexico as of August 22, 2020
Source: Mexico´s Government
Also, in the ratio of deaths to the total
population, Nayarit is below the national
average, reaching position number 17
(Government of Mexico, August 22, 2020).
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
2,000,000
03
/01
/20
20
17
/01
/20
20
31
/01
/20
20
14
/02
/20
20
28
/02
/20
20
13
/03
/20
20
27
/03
/20
20
10
/04
/20
20
24
/04
/20
20
08
/05
/20
20
22
/05
/20
20
05
/06
/20
20
19
/06
/20
20
03
/07
/20
20
17
/07
/20
20
31
/07
/20
20
14
/08
/20
20
28
/08
/20
20
11
/09
/20
20
25
/09
/20
20
09
/10
/20
20
23
/10
/20
20
06
/11
/20
20
20
/11
/20
20
04
/12
/20
20
18
/12
/20
20
Deaths
AMERICAS
EUROPE
SOUTH-EAST ASIA
EASTERN MEDITERRANEAN
AFRICA
WESTERN PACIFIC
1,383,434
1,583,927
1,594,497
1,664,726
1,879,413
2,056,277
2,329,734
2,519,105
3,105,037
7,484,285
10,224,303
18,972,813
0 10,000,000 20,000,000
Mexico
Argentina
Colombia
Germany
Spain
Italy
The United Kingdom
France
Russian Federation
Brazil
India
United States of
America
Sick from Covid-19 by Country
Accumulated Cases
42,171
42,650
50,122
54,814
55,827
62,732
71,109
72,370
122,426
148,153
191,139
330,644
0 200,000 400,000
Colombia
Argentina
Spain
Iran
Russian Federation
France
The United Kingdom
Italy
Mexico
India
Brazil
United States of
America
Death from Covid-19 by
Country Accumulated Deaths
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
DIS
TR
ITO
FE
DE
RA
L
ME
XIC
O
GU
AN
AJU
AT
O
TA
BA
SC
O
VE
RA
CR
UZ
NU
EV
O L
EO
N
PU
EB
LA
TA
MA
UL
IPA
S
SO
NO
RA
CO
AH
UIL
A
JAL
ISC
O
BA
JA C
AL
IFO
RN
IA
SA
N L
UIS
PO
TO
SI
SIN
AL
OA
GU
ER
RE
RO
YU
CA
TA
N
MIC
HO
AC
AN
OA
XA
CA
QU
INT
AN
A R
OO
HID
AL
GO
CH
IHU
AH
UA
BA
JA C
AL
IFO
RN
IA S
UR
CH
IAP
AS
TL
AX
CA
LA
DU
RA
NG
O
QU
ER
ET
AR
O
CA
MP
EC
HE
AG
UA
SC
AL
IEN
TE
S
MO
RE
LO
S
NA
YA
RIT
ZA
CA
TE
CA
S
CO
LIM
A
Cases
0
0.01
0.02
0.03
0.04
0.05
0.06
0.07
0.08
0.09
0.1
%
36
Article Journal-Macroeconomics and Monetary Economy December, 2020 Vol.4 No.7 28-42
MENDOZA-ALVARADO, Juan José, ROBLES-ZEPEDA, Francisco Javier and SÁNCHEZ-GÓMEZ, Sara Alejandra. Covid-19, economic
activity and formal employment. A look at the effects of the pandemic in
México and Nayarit, 2020. RINOE Journal-Macroeconomics and
monetary economy. 2020
ISSN-On line: 2524-2040
RINOE® All rights reserved.
Apparently, neither by the total number
of patients in absolute values or relative to the
population or in number of deaths Nayarit would
have a serious problem; but that is only in
appearance; As can be seen in Figure 6, by
availability of hospital beds, Nayarit ranked first
in the nation in terms of least availability of beds
with an occupancy of 68% and only 32%
available. This data has constituted an indicator
of permanent pressure and attention for the
political authorities and the health sector in the
state who have made it known knowing the
serious social implications that this fact has. In
terms of availability of beds with a fan, Nayarit
has 26% occupancy and 74% availability,
occupying the 21st position among the group of
states (IRAC Network, accumulated from
August 23, 2020. SSA / SPPS / DGTI / State
Health Services).
Figure 6 Mexico: Availability of general hospital beds,
August 22, 2020
Source: IRAC Network, accumulated from August 23,
2020. SSA / SPPS / DGTI / State Health Services
Nayarit is a federative entity with a
relatively low problem of patients and deaths
from Covid-19, but with a serious public health
problem due to the low number of hospital beds
in the entity; A situation that, as we can see in
Figure 7, is a characteristic of Mexico compared
to other Latin American countries. Mexico has
the lowest number of beds per 1000 inhabitants
compared to Argentina, Brazil, Chile and the
United States; However, in terms of hospitals per
million inhabitants, Mexico has a higher number
compared to Argentina, Brazil and Chile and the
average for Latin America.
Figure 7 Hospital infrastructure
Source: OMS, 2020
In the perspective briefly outlined in the
previous paragraphs, it can be seen that there is
no region of the planet, the American continent
and Mexico that has not been affected to a
greater or lesser degree by the effects of the
pandemic. The measures of confinement and
suspension of non-essential activities have had
an immediate effect on economic and labor
activity. These impacts are described below.
III.2 Sectorial economic activity and formal
employment in Mexico
III.2.1 Sectorial economic activity
Ten months ago, long before the preventive
measures that forced civil, military and private
authorities, as well as the agencies and entities of
the three orders of government, to implement
preventive measures against disease caused by
the SARS-CoV2 virus (COVID-19), among
which the temporary suspension of activities of
the public, social and private sectors that involve
the physical concentration, transit or movement
of people, the global indicator of economic
activity (IGAE) in Mexico had experienced ten
consecutive months of negative economic
growth. The IGAE, as is known, allows to know
and monitor the evolution of the real sector of
the economy in the short term. In Figure 8 we
can see how, since May 2019, the percentage
changes in the real sector of the Mexican
economy have been negative and those related to
the months of April and May are deeper than the
crises of 1995 and 2009. It is in this sense that it
is affirmed that the current economic crisis is
only comparable with the great crisis of 1929-
1932 of the last century.
68 6554 53 52
44 43 41 41 40 40 39 38 38 37 37 36 35 33 32 31 30 29 27 26 25 25 24 2116 15 11
32 3546 48 48
56 57 59 59 60 60 61 62 62 63 63 64 65 67 68 69 70 71 73 74 75 75 76 7984 85 89
0
10
20
30
40
50
60
70
80
90
100
% Occupied % Available
%
0%
10%
20%
30%
40%
50%
60%
Argentina Brasil Chile México EUA América
Latina
OCDE
Hospital beds c/1000 h Hospitals c/million hab
%
37
Article Journal-Macroeconomics and Monetary Economy December, 2020 Vol.4 No.7 28-42
MENDOZA-ALVARADO, Juan José, ROBLES-ZEPEDA, Francisco Javier and SÁNCHEZ-GÓMEZ, Sara Alejandra. Covid-19, economic
activity and formal employment. A look at the effects of the pandemic in
México and Nayarit, 2020. RINOE Journal-Macroeconomics and
monetary economy. 2020
ISSN-On line: 2524-2040
RINOE® All rights reserved.
Figure 8 Global indicator of economic activity (IGAE) in
Mexico, 1994-June 2020, seasonally adjusted series,
annual variation
Source: INEGI
With the suspension of non-essential
economic activities, the recession of the
Mexican economy would deepen during the
months of the day of healthy distance: -2.6% in
March, -19.6% in April and -21.6% in May, a
situation that can be observed In table 1. It is
observed that industrial activity decreased -4.8%
in March, -29.7% in April and -29.7 in May; the
services sector decreased -2.1% in March, -
15.9% in April and -19.1% in May.
Year-
month
IGAE IGAE S. Prim. IGAE S. Sec. IGAE S. Terc.
Percentage change compared to the same month of the
previous year
2020/03 -2.6 8.1 -4.8 -2.1
2020/04 -19.6 1.4 -29.7 -15.9
2020/05 -21.6 2.5 -29.7 -19.1
Table 1 Annual% variation of the Global Index of
Economic Activity (IGAE) in Mexico by sector, March-
May 2020
Source: INEGI
Behind the negative growth rates of the
global indicator of economic activity are the
severe impacts that social confinement measures
have had on industry and services. In the case of
the IGAE of the industrial sector of our country,
it has experienced 20 consecutive months of
negative economic growth: from October 2018
to May 2020, industrial activity has been
decreasing steadily, deepening these falls in the
months of April and May of this year as a result
of the pandemic.
The explanation for the fall of the
industrial IGAE is found in the conjunction of
disinvestment processes existing before the
economic crisis generated by Covid-19 that are
articulated with the processes caused by the
pandemic in the world.
Specifically: the 78 months of negative
growth that mining has experienced from March
2013 to May 2020 out of a total of 88 months
that have elapsed; in the 22 months of negative
economic growth in the construction sector from
August 2018 to May 2020 and in the 8 months
of constant decline in manufacturing from
October 2019 to May 2020. In the case of these
three industrial activities, What the pandemic
has done is to make the fall deeper, deeper, a
situation that can be seen in Table 2.
Year-
month
Secondary sector
Mini
ng
Energy, water
and gas
Buildi
ng
Manufac
ture
2020/03 1.9 -0.6 -7.0 -6.4
2020/04 -3.8 -3.4 -38.4 -35.6
2020/05 -5.8 -12.9 -35.9 -35.6
Note: percentage change with respect to the same
month of the previous year.
Table 2 Annual% variation of the Global Index of
Economic Activity (IGAE) of the Sector Secondary in
Mexico, March-May 2020
Source: INEGI
With its own and different dynamics, the
services sector also contributes to explain the
negative behavior of the IGAE of the Mexican
economy.
Unlike the industrial sector, services had
been growing positively in a sustained and
constant way until before the Covid-19 crisis. As
expected, activities related to wholesale and
retail trade, transport and media, cultural and
sports entertainment, and hotels and food and
beverage preparation fell sharply, with the
increase being spectacular. of hotels and food
and beverage preparation: -70.4% in April and -
72.1% in May, situation that can be seen in Table
3.
Year month Service sector
Wholesale
trade
Retail
trade
Transp.
and
media
Education,
health and
social
assistance
Cultural and
sports
entertainment
Hospitality and
food and
beverage
preparation
2020/01 -5.0 1.7 -0.1 -1.5 -0.9 2.3
2020/02 -7.3 -0.5 0.0 -0.7 -1.1 1.0
2020/03 -4.5 -2.7 -2.8 -1.8 -8.0 -26.3
2020/04 -18.9 -32.0 -28.6 -1.0 -30.3 -70.4
2020/05 -32.4 -33.8 -29.9 -1.3 -33.3 -72.1
Note: percentage change with respect to the same month of the previous year
Table 3 Annual% variation of the Global Index of
Economic Activity (IGAE) of the Sector Services in
Mexico, January-May 2020
Source: INEGI
-25
-20
-15
-10
-5
0
5
10
15
Var. %
38
Article Journal-Macroeconomics and Monetary Economy December, 2020 Vol.4 No.7 28-42
MENDOZA-ALVARADO, Juan José, ROBLES-ZEPEDA, Francisco Javier and SÁNCHEZ-GÓMEZ, Sara Alejandra. Covid-19, economic
activity and formal employment. A look at the effects of the pandemic in
México and Nayarit, 2020. RINOE Journal-Macroeconomics and
monetary economy. 2020
ISSN-On line: 2524-2040
RINOE® All rights reserved.
III.2.2 Labor dynamics in the Mexican
economy
To identify the global dynamics of labor activity
in Mexico, the Global Index of Employed
Personnel in Economic Sectors (IGPOSE) is
used. This indicator has been constructed based
on the 2014 Economic Censuses (data from
2013) which report a total of 21.6 million
employed persons in our country, of which
approximately 89.0% are working in the five
economic sectors contemplated in the
calculation of the IGPOSE (construction
companies, manufacturing industries, wholesale
and retail trade and non-financial private
services) and represents, using econometric
methods, a very adequate approximation of the
employed personnel of the non-agricultural
sectors, complements the information generated
in households, shows the evolution of this
variable for the economy as a whole and serves
as input for the analysis, monitoring and
decision-making of the various sectors of
society.
As can be seen in Figure 9, since June
2018 a decreasing trend has been observed in the
global index of employed personnel in the
economic sectors (IGPOSE) as a result of the fall
in economic activity in the industrial sector to
which they are going to come to add the effects
of the pandemic on the industrial and services
sectors, which will cause the IGPOSE to be
negative during the months of March, April and
May: -1.12%, -4.83% and -6.91% respectively.
It can also be seen that the depth of the fall in
May exceeds -6.3% in May of the 2009
international financial crisis. In said crisis,
IGPOSE experienced 15 consecutive months of
negative economic growth, in this sense the The
current crisis is still unknown because it is still
ongoing and its future is uncertain and
unpredictable.
Figure 9 Global Index of Employed Personnel of
Economic Sectors in Mexico, 2009-june 2020, seasonally
adjusted figures. Annualized variation. Base 2013 = 100
Source: INEGI
A perspective that complements the
perspective offered by the index described above
is the one offered by the behavior of the so-called
formal employment, that is, the one registered
with the Mexican Institute of Social Security
(IMSS) and which allows us to account for the
state that keeps the economic activity of the
formal sector of the economy.
Figure 10 Growth in permanent and temporary
employment registered with the IMSS, 1999-August 2020 Source: INEGI
As can be seen in Figure 10, the lowest
growth rate has been related to temporary
employment: -8.58% in the month of July 2020,
much deeper than the -2.83% of the month of
May in the crisis of 2009 and very close to the -
11.32% of the month of July 2001. For its part,
the behavior of permanent employment is much
more stable, although in the crisis of 2009 its fall
was deeper than that of temporary employment:
-4.46% in the July, while temporary employment
only fell -2.8% in May 2009. The volatility of
temporary employment is given by its standard
deviation which is 5.69 while that of permanent
employment is 2.32.
Figure 11 Formal jobs generated accumulated in Mexico,
January to August, 2020
Source: STyPS
-8
-6
-4
-2
0
2
4
20
09/0
1
20
09/0
5
20
09/0
9
20
10/0
1
20
10/0
5
20
10/0
9
20
11/0
1
20
11/0
5
20
11/0
9
20
12/0
1
20
12/0
5
20
12/0
9
20
13/0
1
20
13/0
5
20
13/0
9
20
14/0
1
20
14/0
5
20
14/0
9
20
15/0
1
20
15/0
5
20
15/0
9
20
16/0
1
20
16/0
5
20
16/0
9
20
17/0
1
20
17/0
5
20
17/0
9
20
18/0
1
20
18/0
5
20
18/0
9
20
19/0
1
20
19/0
5
20
19/0
9
20
20/0
1
20
20/0
5
-15
-10
-5
0
5
10
15
20
25
30
Empleo Permanente Empleo Eventual
Var. %
-237,027
192,094
61,501
-493,746
-921,583 -925,490
-1,012,708-1200000
-1000000
-800000
-600000
-400000
-200000
0
200000
400000
-
39
Article Journal-Macroeconomics and Monetary Economy December, 2020 Vol.4 No.7 28-42
MENDOZA-ALVARADO, Juan José, ROBLES-ZEPEDA, Francisco Javier and SÁNCHEZ-GÓMEZ, Sara Alejandra. Covid-19, economic
activity and formal employment. A look at the effects of the pandemic in
México and Nayarit, 2020. RINOE Journal-Macroeconomics and
monetary economy. 2020
ISSN-On line: 2524-2040
RINOE® All rights reserved.
Figure 11 shows the accumulated
number of permanent and eventual formal jobs
lost due to the pandemic during the months of
April, May, June and July, this being the amount
of 925,490 jobs lost as of July 2020.
III.3 Sectorial economic activity and formal
employment in Nayarit
III.3.1 Sectorial economic activity
The dynamics of the Nayarit economy is
determined for the most part by the link with the
dynamics of the national economy: with the
agricultural sector, services and industry; to a
lesser degree with the exterior through tourism,
foreign investment, remittances, agricultural
exports and migration. The negative economic
growth experienced by the Mexican economy
since May 2019 would negatively impact the
dynamics of the Nayarit economy, causing, as
can be seen in Figure 12, the July-September and
October-December 2019 quarters to be negative:
-3.3 and -1.0% respectively, but also the first and
second quarters of 2020 with -3.1% and -23.1%
respectively.
Additionally, it must be added that the
Nayarit economy did not grow in any quarter
throughout 2018: -0.3%, -2.7%, -0.0% and -
0.9%, first, second, third and fourth quarters
respectively of 2018.
The context briefly described prior to the
Covid-19 crisis determines a negative
expectation for the second and third quarters of
2020, which show the effects of the Covid-19
crisis with greater depth than those experienced
previously.
Figure 12 Quarterly indicator of state economic activity
in Nayarit, 2006-2020/IIT
Source: INEGI
In line with what is happening with the
national economy, the poor performance of the
Nayarit economy is mainly explained by the
negative economic growth of the industrial and
service sectors of Nayarit. In the case of the
industrial sector, in line with the national
economy, it is observed that mining has
experienced negative growth rates since the
second quarter of 2017; Likewise, the
construction sector has experienced negative
economic growth rates since the third quarter of
2015, a situation that is very similar to those
experienced by the energy, water and gas and
manufacturing sectors. These trends, which are
medium and long-term trends largely express the
influence of the Mexican economy on the
economy of Nayarit, this situation can be seen in
Figure 13. The outlook for the third and fourth
quarters of 2020 is that they will be negative,
although of less depth than that observed in the
first and second quarters of 2020, which were -
16.4% and -26.9% respectively.
Figure 13 Quarterly indicator of the economic activity of
the Secondary Sector in Nayarit, 2004-2020/IIT
Source: INEGI
Similarly, the services sector of the
Nayarit economy has also contributed to
negatively impact the economy as a whole as
expressed by the Quarterly Indicator of State
Economic Activity until the second quarter of
2020 for which information is available. Figure
14 shows how since the first quarter of 2019 the
service sector of the Nayarit economy has
experienced negative economic growth rates: -
0.7%, -1.0%, -1.8%, -0.8%, -0.8% and -23.8 %
during quarters I, II, III and IV of 2019 and first
and second quarters of 2020 respectively. One
of the most representative components of the
services sector is commerce, which had been
experiencing negative growth rates from the
second quarter of 2018 to the fourth quarter of
2019, slightly improving in the first quarter of
2020 with 0.3% positive economic growth.
-15
-10
-5
0
5
10
15
Var. %
-40
-20
0
20
40
60
80
100
Var. %
40
Article Journal-Macroeconomics and Monetary Economy December, 2020 Vol.4 No.7 28-42
MENDOZA-ALVARADO, Juan José, ROBLES-ZEPEDA, Francisco Javier and SÁNCHEZ-GÓMEZ, Sara Alejandra. Covid-19, economic
activity and formal employment. A look at the effects of the pandemic in
México and Nayarit, 2020. RINOE Journal-Macroeconomics and
monetary economy. 2020
ISSN-On line: 2524-2040
RINOE® All rights reserved.
Figure 14 Quarterly indicator of the economic activity of
the Tertiary Sector in Nayarit, 2004-2020/IIT
Source: INEGI
The expectation of economic growth in
the services sector of the Nayarit economy for
the third and fourth quarters of 2020 is negative,
which will accumulate practically two
consecutive years without growing.
III.3.2 Formal employment in Nayarit
Formal employment generated by the private
sector in Nayarit until June 2020 was 144,319,
which is the sum of permanent and temporary
workers, a magnitude described in Figure 15 by
the blue line, which reflects a significant drop in
relation to the 159,617 workers reported in
February of that same year. In terms of
percentage variation, as can be seen in Figure 16,
the 7,060 total jobs generated during the month
of January 2020 (6,436 temporary jobs and 624
permanent jobs) constituted the second most
important percentage variation in the economic
history of formal employment in Nayarit during
the last twenty years: 12.57%; only surpassed by
the 17.31% registered in June 2004.
Figure 15 Evolution of the total number of Workers
affiliated to the IMSS in Nayarit, 1999-June 2020
Source: IMSS
A fact that draws the attention of this
analysis consists of the discordance existing
between the fall of -3.1% in the first quarter of
2020 of the quarterly indicator of state economic
activity (ITAEE) of Nayarit which, it is
observed, marginally affects formal
employment. Despite the fall in economic
activity in the first quarter of 2020, total
employment affiliated with the IMSS grew at
rates of 12.57%, 12.24% and 2.26% during
January, February and March of the mentioned
year.
Figure 16 Growth rate of the total number of workers
affiliated to the IMSS in Nayarit, 2000-August 2020
Source: IMSS
But, although formal employment shows
some resistance to endogenous economic
slowdown processes, this is not the case with the
ravages caused by the Covid-19 effect.
With data from the Mexican Social
Security Institute (IMSS) up to June 2020, as can
be seen in Figure 17, the spectacular job creation
in January and February decreases significantly
during the month of March, which records a loss
of -7,784 jobs reaching its lowest point in the
month of April with -17,181 jobs lost.
Figure 17 Formal jobs generated accumulated in Nayarit,
January-June 2020
Source: IMSS
-30
-25
-20
-15
-10
-5
0
5
10
15
Var. %
0
20000
40000
60000
80000
100000
120000
140000
160000
180000
Trabajadores Asegurados Trabajadores permanentes
Trabajadores eventuales
-10
-5
0
5
10
15
20
Var. %
4,355
7,300
-7,784
-17,181
-9,541
1,8833,528
-383
-20000
-15000
-10000
-5000
0
5000
10000
41
Article Journal-Macroeconomics and Monetary Economy December, 2020 Vol.4 No.7 28-42
MENDOZA-ALVARADO, Juan José, ROBLES-ZEPEDA, Francisco Javier and SÁNCHEZ-GÓMEZ, Sara Alejandra. Covid-19, economic
activity and formal employment. A look at the effects of the pandemic in
México and Nayarit, 2020. RINOE Journal-Macroeconomics and
monetary economy. 2020
ISSN-On line: 2524-2040
RINOE® All rights reserved.
Notwithstanding the foregoing, the loss
of formal employment decreases during the
month of May, with only -9,541 jobs lost, and in
June there were 1,883 jobs generated
accumulated from January to June 2020.
The articulation of existing economic
processes in the Nayarit economy in the medium
and long term prior to the pandemic, added to
those of Covid-19, constitute a similar fact, in
terms of formal employment, to that registered
during the 2009 crisis. Observe in Figure 17, the
drop in formal employment in the Nayarit
economy of -5.86% during the month of May
2020 is higher than the -4.73% of May 2009.
The above said in absolute terms means
that in the crisis of the Covid-19 of 2020, 17,181
formal jobs were lost, while in the economic-
financial crisis of 2009, 6,493 formal jobs were
lost in the Nayarit economy. It is in this sense
that it can be affirmed that the depth of the
economic crisis caused by the pandemic is
greater than that caused by the economic-
financial crisis of 2009.
Conclusions
1. In relation to the effects of the
pandemic on economic activity and
employment, both the neoclassical and post-
Keynesian schools point out the existence of
negative effects on both the supply and demand
sides; They also agree that their magnitudes are
amplified due to the temporary public health
restrictions imposed such as social confinement
and the suspension of non-essential activities.
Despite this apparent coincidence, the
analytical-conceptual and methodological
frameworks that characterize and differentiate
both schools of economic thought lead them to
this result in different ways. In this way,
neoclassical theory considers that the
transmission mechanism of the pandemic occurs
on the supply side, that is, on the side of the
reduction in the number of workers who come to
work, negatively impacting the supply of goods
and services and secondarily on consumption
(demand).
For post-Keynesian thought, the line of
causality of the pandemic moves from the
measures of confinement and suspension of non-
essential activities to a fall in effective demand
(from the point of view of a company considered
"non-essential", requiring that the company
closing its consumer-oriented outlets is more
similar to a withdrawal from demand for its
goods or services than to a withdrawal of
voluntary labor). Even without an order, public
health messages encourage people to stay home
as much as possible, which is directly
experienced as a loss of demand.
2. Due to its effects on economic activity
and employment, in Mexico and Nayarit, we are
facing one of the deepest economic and labor
crises in our economic history, deeper than the
economic-financial crisis of 2008-2009 and in In
many ways comparable to that of 1929. There is
a -21.6% drop in economic activity in Mexico in
the month of May 2020 and a -23.1% drop in the
case of the Nayarita economy in the second
quarter of the same year. The drop in economic
activity called hotels, food preparation and
beverages is the deepest for the Mexican
economy: -70.4% in April and -72.1% in May.
In relation to formal employment, a loss of
925,490 jobs was recorded as of July for the
Mexican economy as a whole and of 17,181 jobs
for the Nayarit economy as of April 2020.
3. In relation to the apparent exogeneity
of the pandemic, assumed by neoclassical
economic thought, post-Keynesianism proposes
that said virus has an endogenous character,
insofar as it is the result of excessive human
pressure on the biosphere, and that the effects of
the pandemic it has caused in the world have
been exacerbated by policy recommendations
derived from conventional economic thinking. It
is a phenomenon about which, we know that it
can be caused by the historical way in which the
human being relates to nature at the present time.
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monetary economy. 2020
ISSN-On line: 2524-2040
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“Impact of COVID-19 on the economy of micro, small and medium
enterprises in Mexico”
SERRANO-TORRES, Ma. Guadalupe, ZAMBRANO-
BALDIVIEZO, Oscar Javier, QUEZADA-FLORES Ma. de la
Luz and MÁRQUEZ-DE ANDA Camilo
Universidad Tecnológica de León, Guanajuato
Corporación Universitaria Minuto de DIOS- UNIMINUTO,
Santander Colombia.
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enterprises: A case study in Atlacomulco, Mexico”
CARRILLO-ÁNGELES, Rebeca Yurani, ALCÁNTARA-
MANCILLA, Marycarmen and CRUZ-SORIANO, Emmanuel
Universidad Politécnica de Atlacomulco
Universidad Autónoma del Estado de México
“Solutions and strategies of Nezahualcoyotl´s business before the
pandemic”
GUTIÉRREZ-ZEPEDA, Martha del Pilar
Universidad Tecnológica de Nezahualcóyotl
“Covid-19, economic activity and formal employment. A look at the
effects of the pandemic in México and Nayarit, 2020”
MENDOZA-ALVARADO, Juan José, ROBLES-ZEPEDA,
Francisco Javier and SÁNCHEZ-GÓMEZ, Sara Alejandra
Universidad Autónoma de Nayarit
Journal-Macroeconomics and Monetary economy