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Effectiveness of COVID-19 state aid for microenterprises in Poland

Author

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  • Kochaniak, Katarzyna
  • Ulman, Paweł
  • Zajkowski, Robert

Abstract

The effectiveness of COVID-19 state aid for microenterprises in Poland is presented. The quantitative analysis based on the logistic regression models revealed that it was limited. Our results show that state aid was more readily transferred to micro-entities that had been insignificant employers and expanding their performance during the pandemic through increasing employment and revenues. Since the governmental programmes in Poland were assumed to stabilise enterprises’ revenues, our study allowed assessing their effectiveness in this regard. The problem of longer-term revenue decreases and increases was identified among supported micro-entities. Revenue decreases primarily resulted from the overall deterioration of their economic position. These beneficiaries, most of all, stood out with longer-term declines in liquidity and profitability, redundancies of employment, and stressed access to financial market funding. Thus, the aid was insufficient concerning their actual needs, though it came from generous measures. In turn, the supported micro-entities with revenue growth during the pandemic were found to be resilient to stress conditions, with access to selected market and non-market liquidity, and increasing their liquidity and profitability in the longer term. Despite the fact that they did not need to be supported, they often benefited from state aid provided within an unconditionally available measure. Based on the results obtained, recommendations for policymakers have been formulated regarding allocation aspects of support for micro-entities during a pandemic.

Suggested Citation

  • 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.
    • Handle: RePEc:eee:reveco:v:86:y:2023:i:c:p:483-497
    DOI: 10.1016/j.iref.2023.03.038
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    More about this item

    Keywords

    State aid; COVID-19; Effectiveness; Microenterprise; Revenues;
    All these keywords.

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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