Laying Off Versus Training Workers: How Can Saudi Entrepreneurs Manage the COVID-19 Crisis?

• 발행기관: 한국유통과학회
• 저자명: Asma RAIES Mohamed BEN MIMOUN
• 간행물 정보: 『The Journal of Asian Finance, Economics and Business(JAFEB)』Vol. 8 No.4, 673~685쪽, 전체 13쪽
• 주제분류: 경제경영 > 경제학
• 파일형태: PDF
• 발행일자: 2021.04.30

영문 초록

This study aims to determine theoretically the best workers layoff/training strategy that entrepreneurs should apply to manage the COVID-19 crisis successfully. It also examines the impacts of the Saudi government’s emergency measures on firm performance. The paper develops a theoretical framework in which the optimal control technics is applied to model the entrepreneur’s hiring, layoff, and training behaviors. The results show that, during the current COVID-19 pandemic, the entrepreneur should first lay off the less productive workers to reduce labor costs. As more and more inefficient workers quit and profit increases, the entrepreneur starts expanding his activity and training workers. In the long run, only the training activity allows the firm efficiency to grow at a constant rate. This finding suggests that the key to long-run economic recovery in Saudi Arabia will rely on training, innovation, and adaptability to the new digital environment. The paper also shows that the Saudi government initiative of covering 60% of salaries for the small- and medium-sized entrepreneurs during the COVID-19 pandemic will enhance training activities in small- and medium-sized enterprises and improve their efficiency in both the short and long run. This policy will also prevent Saudi entrepreneurs from laying off half of their staff.

목차

1. Introduction

2. The Model

3. The Steady State

4. Comparative Dynamics

5. Numerical Simulations

6. Conclusion

키워드

Layoff Training Firm’s efficiency Saudi entrepreneurs COVID-19