Download This PaperPostdisaster Subsidies for Small and Medium Firms: Insights for Effective Targeting
27 Pages Posted: 4 May 2020 Last revised: 4 Jan 2023
Date Written: October 29, 2019
Abstract
This paper examines the effect of capital subsidies after great disasters on the recovery of small and medium-sized enterprises (SMEs) using propensity score matching estimations. The estimates show that capital subsidies were effective for the recovery of the performance of SMEs in the retail sector. However, in manufacturing and other service sectors, it finds no significant difference between the recovery of SMEs with and without the subsidy. Utilizing firm-level supply chain data, it further explores the mechanism behind the heterogeneity across sectors. The results suggest that the heterogeneity comes from variations in the degree of private support across sectors rather than variations in supply chain disruption.
Keywords: disasters, enterprise recovery, microeconomic impact of aid, supply chains
JEL Classification: L10, Q54, R10
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