Firms’ participation in the Swiss COVID-19 loan programme

Lucas Fuhrer, Marc-Antoine Ramelet and Jörn Tenhofen

Swiss Journal of Economics and Statistics, 2021, vol. 157, issue 1, 1-22

Abstract: Abstract This paper analyses the determinants of firm participation in the Swiss COVID-19 loan programme, which aims to bridge firms’ liquidity shortfalls that have resulted from the pandemic. State-guaranteed COVID-19 loans are widely used by Swiss firms, with 20% of all firms participating, resulting in a sizeable programme of 2.4% of GDP. We use a comprehensive dataset to study the determinants of firm participation. Our results can be summarised as follows. First, participation was largely driven by the exposure of a firm to lockdown restrictions and to the intensity of the virus in the specific region. Second, we show that firms associated with lower liquidity ratios had a significantly higher probability of participating in the programme. Third, we find no clear evidence that firm indebtedness affected participation in the programme and no evidence that pre-existing potential “zombie firms” participated more strongly in the loan programme. Fourth, we show that the programme reached younger and smaller firms, which could be financially more vulnerable as they are less likely to obtain outside finance during a crisis. Overall, we conclude that given its objective, the programme appears to be successful.

Keywords: COVID-19; Loan programme; Guarantees; Firm behaviour (search for similar items in EconPapers)
JEL-codes: D22 H81 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://link.springer.com/10.1186/s41937-021-00070-4 Abstract (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:sjecst:v:157:y:2021:i:1:d:10.1186_s41937-021-00070-4

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/41937

DOI: 10.1186/s41937-021-00070-4

Access Statistics for this article

Swiss Journal of Economics and Statistics is currently edited by Marius Brülhart

More articles in Swiss Journal of Economics and Statistics from Springer, Swiss Society of Economics and Statistics Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().