Effects of COVID-19 Related Government Response Stringency and Support Policies: Evidence from European Firms

36 Pages Posted: 11 Jun 2021

Date Written: 2021

Abstract

In this paper we employ survey information on more than 10,000 Southern and Eastern European firms and panel data methods to assess the effects of the COVID-19-related lockdown and government support policies on the business operations of enterprises. Our findings reveal considerable size- and sector-related effect heterogeneity, with small firms, exporting firms and firms operating in the facility sector experiencing the largest losses in terms of sales. A complete lockdown leads to an average decrease in sales by approximately 64%. We also document a disproportionate impact on female self-employed. Furthermore, state aid in the form of deferral of payments or wage subsidies were the most effective government support instruments. For instance, wage subsidies saved up to 2.7 employees per firm in the surveyed enterprises.

JEL Classification: D220, H120, H320

Suggested Citation

Janzen, Benedikt and Radulescu, Doina, Effects of COVID-19 Related Government Response Stringency and Support Policies: Evidence from European Firms (2021). CESifo Working Paper No. 9116, Available at SSRN: https://ssrn.com/abstract=3863819 or http://dx.doi.org/10.2139/ssrn.3863819

Benedikt Janzen (Contact Author)

University of Bern ( email )

Gesellschaftsstrasse 49
Bern, BERN 3001
Switzerland

Doina Radulescu

University of Bern ( email )

Gesellschaftsstrasse 49
Bern, BERN 3001
Switzerland

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