Small business under the COVID-19 crisis: Expected short- and medium-run effects of anti-contagion and economic policies

Kohei Kawaguchi, Naomi Kodama and Mari Tanaka

Journal of the Japanese and International Economies, 2021, vol. 61, issue C

Abstract: This study makes a causal inference on the effects of anti-contagion and economic policies on small business by conducting a survey on Japanese small business managers’ expectations about the pandemic, policies, and firm performance. We first find the business suspension request decreased targeted firms’ sales by 10 percentage points on top of the baseline 9 percentage points decline due to COVID-19, even though the Japanese anti-contagion policy was in a form of the government’s request that is not legally enforceable. Second, using a discontinuity in the eligibility criteria, we find lump-sum and prompt subsidies improved firms’ prospects of survival by 19 percentage points. Third, the medium-run recovery of firms’ performance is expected to depend crucially on when infections would end, indicating that the anti-contagion policies could complement longer-run economic goals.

Keywords: COVID-19; Causal inference; Manager’s expectation; Business performance; Subsidy; Small business; Regression discontinuity design; Randomized controlled trial; Difference-in-difference; Pandemic; Infection; Anti-contagion policies; Lockdown; Survey (search for similar items in EconPapers)
JEL-codes: D22 D80 D84 E17 E32 E66 I18 L50 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

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Related works:
Working Paper: Small Business under the COVID-19 Crisis: Expected Short- and Medium-Run Effects of Anti-Contagion and Economic Policies (2021)
Working Paper: Small Business under the COVID-19 Crisis: Expected Short- and Medium-Run Effects of Anti-Contagion and Economic Policies (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jjieco:v:61:y:2021:i:c:s0889158321000174

DOI: 10.1016/j.jjie.2021.101138

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