Cross-country evidence on the allocation of COVID-19 government subsidies and consequences for productivity

Tommaso Bighelli, Tibor Lalinsky and Juuso Vanhala

Journal of the Japanese and International Economies, 2023, vol. 68, issue C

Abstract: We study the consequences of the Covid-19 pandemic and related policy support on productivity. We employ an extensive micro-distributed exercise to access otherwise unavailable individual data on firm performance and government subsidies. Our cross-country evidence for five EU countries shows that the pandemic led to a significant short-term decline in aggregate productivity and the direct support to firms had only a limited positive effect on productivity developments. A thorough comparative analysis of the distribution of employment and overall direct subsidies, considering separately also relative firm-level size of support and the probability of being supported, reveals ambiguous cross-country results related to the firm-level productivity and points to the decisive role of other firm characteristics.

Keywords: Covid-19; Productivity; Firm-level data; Government support; Employment subsidies; Cross-country analysis (search for similar items in EconPapers)
JEL-codes: D22 H25 J38 L29 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jjieco:v:68:y:2023:i:c:s0889158323000011

DOI: 10.1016/j.jjie.2023.101246

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