Does COVID-19 state aid reach the right firms? COVID-19 state aid, turnover expectations, uncertainty and management practices

Jesse Groenewegen, Sjoerd Hardeman and Erik Stam

Journal of Business Venturing Insights, 2021, vol. 16, issue C

Abstract: A much debated issue in the discussion about COVID-19 state aid to firms is the extent to which these measures keep non-viable firms afloat. What are the characteristics of firms that receive aid and are they viable in the long term? Based on a survey of 1,151 firms in the Netherlands, mainly SMEs, we find that on average, government support goes to better-managed firms and to those with low turnover expectations and high turnover uncertainty. This suggests that COVID-19 state aid tends to go to firms that are most in need of it now and are more likely to be viable in the long term, as indicated by the quality of their management practices.

Keywords: COVID-19; State aid; Business support; Management practices; Uncertainty (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (23)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jobuve:v:16:y:2021:i:c:s2352673421000408

DOI: 10.1016/j.jbvi.2021.e00262

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