Assessing the Effectiveness of COVID-19 Support Policies on Firm Performance: Evidence from Japanese SMEs

Manabu Furuta ()
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Manabu Furuta: Graduate School of Economics, Kobe University

No 2518, Discussion Papers from Graduate School of Economics, Kobe University

Abstract: This study evaluates the effectiveness of government financial support for small and medium-sized enterprises (SMEs) in Japan during the COVID-19 pandemic. The Japanese government implemented various programs to support SMEs facing financial distress, leading to a notable decline in bankruptcies. We find that SMEs with strong ties to main banks and exporters were more likely to receive support, while subsidiaries or affiliates of large corporations were less likely to benefit. Although prior studies suggest that such policies may encourage "zombie" firms, our analysis shows that in the manufacturing sector, financial assistance fostered investment. JEL Classification: D22; D25; L52

Keywords: SMEs; COVID-19; Financial Support; PSM-DID (search for similar items in EconPapers)
Pages: 28 pages
Date: 2025-08
New Economics Papers: this item is included in nep-cfn, nep-ent, nep-iaf and nep-sbm
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