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Volume 4, Issue 7 – July – December – 2020

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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


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: [email protected])

† Researcher contributing first author.

© RINOE Journal – Taiwan www.rinoe.org/taiwan

2


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


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








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








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








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.

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19 en México”, recuperado en;

https://politica.expansion.mx/mexico/2020/12/3

1/covid-19-mexico-cierra-el-ano-con-125-807-

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casos?utm_source=push_notification

Cardona (2020), Forbes, “Tecnología: la clave

para que las PyMEs sobrevivan a la nueva

normalidad”, recuperado en;

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clave-para-que-las-pymes-sobrevivan-a-la-

nueva-normalidad/

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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

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Business, junio (2020), , ISBN: 978-92-1-

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estornudo-del-covid-19-en-las-pymes-

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cierran un millón de mipymes”, recuperado en;

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de-manera-definitiva-por-el-covid-inegi

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7


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: [email protected])



8


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



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








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








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








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








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








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


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








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.


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.


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


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








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

c/es/home/library/crisis_prevention_and_recove

ry/social-and-economic-impact-of-covid-19-

and-policy-options-in-arg.html.

Ayuntamiento Constitucional de Atlacomulco

2019-2021. (2019). Gaceta Municipal.

Atlacomulco. Obtenido de

http://atlacomulco.gob.mx/documentos/Gacetas

/2019/Gaceta%20Municipal%20A%C3%B1o%

201%20Numero%206%20Volumen%201.pdf.

Ayuntamiento de Atlacomulco. (2019). Plan de

desarrollo municipal 2019-2021. Obtenido de

http://atlacomulco.gob.mx/documentos/Uippe/P

DM.pdf.

Banco de México. (s.f.). Política Monetaria.

Obtenido de Banxico Educa:

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

para las finanzas públicas por la pandemia de

covid-19. Pluralidad y Consenso, 10(44), 94-

101.

Comisión Económica de América Latina y el

Caribe. (06 de Octubre de 2020). Lanzamienrto

del estudio econpomico de ALC 2020.

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

econompia mundial. Obtenido de

https://www.imf.org/es/Publications/WEO/Issu

es/2020/06/24/WEOUpdateJune2020.

INEGI. (2020). Censos Económicos 2019.

Resultados definitivos., (págs. 33-35).

Instituto de Información e Investigación

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

belisario Domínguez. Senado de la republica.

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).

Organización Mundial de la Salud. Obtenido de

Preguntas y respuestas sobre la enfermedad por

coronavirus (COVID-19):

https://www.who.int/es/emergencies/diseases/n

ovel-coronavirus-2019/advice-for-public/q-a-

coronaviruses.

Secretaria de Salud. Gobierno del Estado de

México. (11 de Octubre de 2020). Casos

positivos y defunciones a COVID-19 por

municipio. Obtenido de Secretaria de Salud:

https://salud.edomex.gob.mx/salud/covid19_mu

nicipio.

Worl Health Organization. (2020). Coronavirus

disease (COVID-19). Obtenido de

https://www.who.int/docs/default-

source/coronaviruse/situation-

reports/20201012-weekly-epi-update-9.pdf.

16


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*†


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.gutié[email protected])



17


GUTIÉRREZ-ZEPEDA, Martha del Pilar. Solutions and

strategies of Nezahualcoyotl´s business before the pandemic.

RINOE Journal- Macroeconomics and monetary economy. 2020



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







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







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







Business in the Metropolitan Area La Paz 

Food 46 

Pharmacy 410 


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 


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


Business in the Metropolitan Area Ixtapaluca 

Food 34 

Pharmacy 260 


Hardware 50 


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 


Stockpile 140 

Tlapalería 135 


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


Business in the Metropolitan Area Texcoco 

Food 67 

Pharmacy 288 


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 


Stockpile 173 

Tlapalería 136 


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


According to the total number of


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







Business in the Metropolitan Area Chimahualcan 

Food 85 

Pharmacy 775 


Hardware 385 


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 


Stockpile 219 

Tlapalería 598 


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 


Hardware 156 


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 


Stockpile 382 

Tlapalería 322 


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







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







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


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?


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







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?


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?


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?


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







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?


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?


As the results show, 82% of 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?


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?


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







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?


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?


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







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

https://www.dinero.com.sv/es/pyme/habilitan-registro-en-l%C3%ADnea-para-mypes.html

https://www.dinero.com.sv/es/pyme/habilitan-registro-en-l%C3%ADnea-para-mypes.html

http://www.neza.gob.mx/boletines/2020/julio/374/

http://www.neza.gob.mx/boletines/2020/julio/374/

https://www.uca.ac.cr/wp-content/uploads/2017/10/Investigacion.pdf

https://www.uca.ac.cr/wp-content/uploads/2017/10/Investigacion.pdf

https://www.inegi.org.mx/programas/ecovidie/2020/



https://pymes.org.mx/



https://coronavirus.gob.mx/wp-content/uploads/2020/10/SemaforoCOVID_Metodo.pdf



28


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: [email protected])



29


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




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








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








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








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








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








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

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Cases

AMERICAS

EUROPE

SOUTH EAST ASIA

EASTERN MEDITERRANEAN

AFRICA

WESTERN PACIFIC

35








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

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1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

2,000,000

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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

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%

36








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








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.


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


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








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








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








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








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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Working Paper 27102, National Bureau of

Economic Research, May.

42








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(2020). When will Italy recover? Edit. Levy

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(2020). COVID-19 and the global recession -the

imperative need for a Keynes solution.

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Shapiro, M. D. (1987). Supply shocks in

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https://www.researchgate.net/publication/341049572%20COVID-19%20and%20the%20global%20recession%20–the%20imperative%20need%20for%20a%20Keynes%20solution




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ECOR

“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


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CARRILLO-ÁNGELES, Rebeca Yurani, ALCÁNTARA-

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“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

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