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Does COVID-19 state aid reach the right firms? COVID-19 state aid, turnover expectations, uncertainty and management practices

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  • Groenewegen, Jesse
  • Hardeman, Sjoerd
  • Stam, Erik

Abstract

A much debated issue in the discussion about COVID-19 state aid to firms is the extent to which these measures keep non-viable firms afloat. What are the characteristics of firms that receive aid and are they viable in the long term? Based on a survey of 1,151 firms in the Netherlands, mainly SMEs, we find that on average, government support goes to better-managed firms and to those with low turnover expectations and high turnover uncertainty. This suggests that COVID-19 state aid tends to go to firms that are most in need of it now and are more likely to be viable in the long term, as indicated by the quality of their management practices.

Suggested Citation

  • Groenewegen, Jesse & Hardeman, Sjoerd & Stam, Erik, 2021. "Does COVID-19 state aid reach the right firms? COVID-19 state aid, turnover expectations, uncertainty and management practices," Journal of Business Venturing Insights, Elsevier, vol. 16(C).
    • Handle: RePEc:eee:jobuve:v:16:y:2021:i:c:s2352673421000408
    DOI: 10.1016/j.jbvi.2021.e00262
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    Cited by:

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    3. Charlie Tchinda & Marcus Dejardin, 2021. "Are Business Policy Measures in Response to the COVID-19 Pandemic to Be Equally Valued? An Exploration According to SMEs Owners’ Business Expectations," Sustainability, MDPI, vol. 13(21), pages 1-42, October.
    4. Iman Cheratian & Saleh Goltabar & Mohammad Reza Farzanegan, 2022. "Survival Strategies under Sanctions: Firm-Level Evidence from Iran," CESifo Working Paper Series 9568, CESifo.
    5. Mari-Isabella Stan, 2021. "Issues concerning the dynamics of labor productivity at the level of the companies in Constanta County operating in the "Construction" sector before and after the COVID-19 pandemic," Technium Social Sciences Journal, Technium Science, vol. 25(1), pages 225-241, November.
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    7. Albert, Christoph & Caggese, Andrea & González, Beatriz & Martin-Sanchez, Victor, 2023. "Income inequality and entrepreneurship: Lessons from the 2020 COVID-19 recession," Journal of Banking & Finance, Elsevier, vol. 149(C).
    8. Bat Batjargal & Sarah Jack & Tomasz Mickiewicz & Erik Stam & Wouter Stam & Karl Wennberg, 2023. "Crises, Covid-19, and Entrepreneurship," Entrepreneurship Theory and Practice, , vol. 47(3), pages 651-661, May.
    9. Kochaniak, Katarzyna & Ulman, Paweł & Zajkowski, Robert, 2023. "Effectiveness of COVID-19 state aid for microenterprises in Poland," International Review of Economics & Finance, Elsevier, vol. 86(C), pages 483-497.
    10. Valentiny, Pál, 2023. "Koronavírus-járvány és versenyszabályozás [Competition policy and the coronavirus pandemic]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(4), pages 398-431.
    11. Zofia Gródek-Szostak & Jadwiga Adamczyk & Małgorzata Luc & Marcin Suder & Justyna Tora & Karolina Kotulewicz-Wisińska & Wojciech Zysk & Anna Szeląg-Sikora, 2022. "Hard Cash in Hard Times—The Effect of Institutional Support for Businesses Shaken by COVID-19," Sustainability, MDPI, vol. 14(8), pages 1-18, April.
    12. Ahmad, Wasim & Kutan, Ali M. & Chahal, Rishman Jot Kaur & Kattumuri, Ruth, 2021. "COVID-19 Pandemic and firm-level dynamics in the USA, UK, Europe, and Japan," International Review of Financial Analysis, Elsevier, vol. 78(C).
    13. Calzada Olvera, Beatriz & Gonzalez-Sauri, Mario & Moya, David-Alexander Harings & Louvin, Federico, 2022. "Covid-19 in Central America: Firm resilience and policy responses on employment," Journal of Policy Modeling, Elsevier, vol. 44(6), pages 1280-1295.
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    15. 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.

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