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The impact of government financial aid and digital tools on firm survival during the COVID-19 pandemic

Author

Listed:
  • David Bruce Audretsch

    (Indiana University Bloomington)

  • Martina Aronica

    (University of Palermo)

  • Maksim Belitski

    (University of Reading
    ICD Business School, Groupe IGENSIA Education)

  • Davide Caddemi

    (University of Palermo)

  • Davide Piacentino

    (University of Palermo)

Abstract

This study explores the effect of bailout capital and digital diversification by small- and medium-sized enterprises (SMEs) on their propensity to survive during and after the COVID-19 pandemic. Using a random sampling of 5469 SMEs from 16 European countries, collected by the World Bank Enterprise Survey in May 2020, January 2021, and May 2021, we conduct a two-stage estimation to examine factors that first affected the propensity of SMEs to access bailout capital, and second, factors that increased the propensity of SMEs to survive longer during and after crises. Two key findings emerge. Diversification of government financial aid and the adoption of various digital tools to leverage the effect of shock by SMEs increase their propensity to survive by sized firms. Moreover, government financial aid does not moderate the effect of digital tool adoption on the propensity to survive. Policy insights and implications are also discussed.

Suggested Citation

  • David Bruce Audretsch & Martina Aronica & Maksim Belitski & Davide Caddemi & Davide Piacentino, 2025. "The impact of government financial aid and digital tools on firm survival during the COVID-19 pandemic," Small Business Economics, Springer, vol. 65(2), pages 813-836, August.
    • Handle: RePEc:kap:sbusec:v:65:y:2025:i:2:d:10.1007_s11187-025-01014-5
    DOI: 10.1007/s11187-025-01014-5
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    Cited by:

    1. Evžen Kočenda & Ichiro Iwasaki, 2025. "Corporate Survival in Emerging European Markets: Impacts of the COVID-19 Pandemic and the Russo-Ukrainian War," CESifo Working Paper Series 12005, CESifo.
    2. Alexander Peter Groh & Christina Guenther & Denis Schweizer & Silvio Vismara, 2025. "Entrepreneurial finance in an extended period of crises," Small Business Economics, Springer, vol. 65(2), pages 763-776, August.

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    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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