Effects of Covid-19 Related Government Response Stringency and Support Policies: Evidence from European Firms

Benedikt Janzen and Doina Radulescu

No 9116, CESifo Working Paper Series from CESifo

Abstract: In this paper we employ survey information on more than 10,000 Southern and Eastern European firms and panel data methods to assess the effects of the COVID-19-related lockdown and government support policies on the business operations of enterprises. Our findings reveal considerable size- and sector-related effect heterogeneity, with small firms, exporting firms and firms operating in the facility sector experiencing the largest losses in terms of sales. A complete lockdown leads to an average decrease in sales by approximately 64%. We also document a disproportionate impact on female self-employed. Furthermore, state aid in the form of deferral of payments or wage subsidies were the most effective government support instruments. For instance, wage subsidies saved up to 2.7 employees per firm in the surveyed enterprises.

Keywords: Covid-19; firms; government support policies; panel data methods (search for similar items in EconPapers)
JEL-codes: D22 H12 H32 (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-ent, nep-eur, nep-sbm and nep-tra
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_9116

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