Small Business under the COVID-19 Crisis: Expected Short- and Medium-Run Effects of Anti-Contagion and Economic Policies
82 Pages Posted: 25 Jun 2020 Last revised: 10 Sep 2020
Date Written: September 10, 2020
This study evaluates anti-contagion and economic policies by conducting a survey on Japanese small business managers' expectations about the pandemic, policies, and firm performance. First, the business suspension request decreased targeted firms' sales by 10 percentage points on top of the baseline 8 percentage points decline due to COVID-19. Second, lump-sum subsidies improved firms' prospects of survival by 19 percentage points. Third, the medium-run recovery of the firms' performance is expected to depend crucially on when infections would end and whether the Tokyo Olympic Games could be held. The results indicate that stringent anti-contagion policies could complement longer-run economic goals.
Keywords: COVID-19, Pandemic, Infection, Anti-contagion policies, Lockdown, Subsidy, Small business, Manager's expectation, Business performance, Survey, Causal inference
JEL Classification: C83, D80, D84, E17, E32, E66, I18, L50
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