Effects of COVID-19 related government response stringency and support policies: Evidence from European firms.

Janzen, Benedikt; Radulescu, Doina (2022). Effects of COVID-19 related government response stringency and support policies: Evidence from European firms. Economic analysis and policy, 76, pp. 129-145. Elsevier 10.1016/j.eap.2022.07.013

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In this paper we employ survey information on more than 10,000 Southern and Eastern European firms to assess the effects of the COVID-19 related lockdown and government support policies on the business operations of enterprises. Our findings reveal considerable size- and sector-related heterogeneity, with small firms, and firms such as hotels and restaurants operating in the facilities sector reporting the largest losses in terms of sales when governments increase the strictness of confinement measures. Fixed effects regression estimates suggest that a complete lockdown results in an average year-on-year sales growth that is approximately 63 percentage points lower than it would be without any curtailment measures. The magnitude of the coefficient on year-on-year sales change for a complete lockdown is 14 percentage points higher for small compared to large enterprises. Furthermore, our results suggest that state aid in the form of deferral of payments or wage subsidies are associated with firms' labor market and financial outcomes in times of crisis. For instance, deferrals of payments are linked to between 0.7 and 1.5 fewer layoffs per firm in the surveyed enterprises compared to other types of support.

Item Type:

Journal Article (Original Article)

Division/Institute:

11 Centers of Competence > KPM Center for Public Management

UniBE Contributor:

Janzen, Benedikt and Radulescu, Doina Maria

Subjects:

300 Social sciences, sociology & anthropology > 350 Public administration & military science

ISSN:

0313-5926

Publisher:

Elsevier

Language:

English

Submitter:

Pubmed Import

Date Deposited:

16 Aug 2022 15:58

Last Modified:

05 Dec 2022 16:22

Publisher DOI:

10.1016/j.eap.2022.07.013

PubMed ID:

35959486

Uncontrolled Keywords:

COVID-19 Firms Government support policies Lockdown

BORIS DOI:

10.48350/171948

URI:

https://boris.unibe.ch/id/eprint/171948

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