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Firm-level policy support during the crisis: So far, so good?

Author

Listed:
  • Péter Harasztosi
  • Laurent Maurin
  • Rozália Pál
  • Debora Revoltella
  • Wouter van der Wielen

Abstract

We use the 2021 vintage of the EIB Investment Survey (EIBIS) which contains a detailed set of questions regarding the nature of the policy support to firms during the COVID-19 crisis. Matched with hard data on the balance sheets and Profit and Loss (P&L) statements of corporations, the survey enables to disentangle the drivers of policy allotment and the impact of the policy support during the investment recovery. First, we focus on the distribution of the policy support and show that it has been allotted mostly owing to the sales losses during the crisis, going to firms most affected during the crisis. We do not find evidence that the support was tilted towards firms already weak before the crisis. Second, we show that the firms that have benefitted from the policy support tend to be more optimistic regarding their investment plans. The impact is especially pronounced for investment in digital technologies.

Suggested Citation

  • Péter Harasztosi & Laurent Maurin & Rozália Pál & Debora Revoltella & Wouter van der Wielen, 2022. "Firm-level policy support during the crisis: So far, so good?," International Economics, CEPII research center, issue 171, pages 30-48.
    • Handle: RePEc:cii:cepiie:2022-q3-171-3
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    Citations

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    Cited by:

    1. Konings, Jozef & Magerman, Glenn & Van Esbroeck, Dieter, 2023. "The impact of firm-level Covid rescue policies on productivity growth and reallocation," European Economic Review, Elsevier, vol. 157(C).
    2. Barbakadze, I., 2023. "With a Little Help from My Friend: Political Connections and Allocation of COVID-19 Aid," Cambridge Working Papers in Economics 2355, Faculty of Economics, University of Cambridge.
    3. Alex Coad & Sofia Amaral-Garcia & Peter Bauer & Clemens Domnick & Peter Harasztosi & Rozália Pál & Mercedes Teruel, 2023. "Investment expectations by vulnerable European firms in times of COVID," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 13(1), pages 193-220, March.
    4. Lily Davies & Mark Kattenberg & Benedikt Vogt, 2023. "Predicting Firm Exits with Machine Learning: Implications for Selection into COVID-19 Support and Productivity Growth," CPB Discussion Paper 444, CPB Netherlands Bureau for Economic Policy Analysis.
    5. Meriküll, Jaanika & Paulus, Alari, 2023. "The impact of the Covid-19 job retention support on employment," Economics Letters, Elsevier, vol. 222(C).
    6. Archanskaia, Elizaveta & Canton, Erik & Hobza, Alexandr & Nikolov, Plamen & Simons, Wouter, 2023. "The asymmetric impact of COVID-19: A novel approach to quantifying financial distress across industries," European Economic Review, Elsevier, vol. 158(C).

    More about this item

    Keywords

    COVID-19; Policy support; Investment; Firm-level evidence; Economic rebound;
    All these keywords.

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • H0 - Public Economics - - General

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