 Zombification of the economy? Assessing the effectiveness of French government support during COVID-19 lockdownMattia Guerini, Lionel Nesta, Xavier Ragot and Stefano Schiavo Journal of Economic Behavior & Organization, 2024, vol. 218, issue C, 263-280 Abstract: This paper evaluates the risk of zombification of the French economy during the COVID-19 pandemic crisis, as a result of the unconditional financial support provided to firms by public authorities, to limit the impact of lockdown measures. We develop a simple theoretical framework based on a partial-equilibrium model to simulate the liquidity and solvency stress faced by a large panel of French firms and assess the impact of government support. Simulation results suggest that those policies helped healthy but illiquid firms to withstand the shock caused by the pandemic. Moreover, the analysis finds no evidence of a “zombification effect”, as less productive companies did not disproportionately benefit from government support. Keywords: COVID-19; Zombie firms; Job-retention schemes; Microsimulation; Policy evaluation (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:218:y:2024:i:c:p:263-280 DOI: 10.1016/j.jebo.2023.12.013 Access Statistics for this article Journal of Economic Behavior & Organization is currently edited by Houser, D. and Puzzello, D. More articles in Journal of Economic Behavior & Organization from Elsevier |
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