The Zombification of the Economy? Assessing the Effectiveness of French Government Support during Covid-19 Lockdown

Mattia Guerini (), Lionel Nesta, Xavier Ragot and Stefano Schiavo ()
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Mattia Guerini: UniBs - Università degli Studi di Brescia = University of Brescia, FEEM - Fondazione Eni Enrico Mattei [Milano]
Stefano Schiavo: UNITN - Università degli Studi di Trento = University of Trento, OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po

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Abstract: This paper evaluates the risk of zombification of the French economy during the COVID-19 pandemic crisis, as a result of the unconditional financial support provided to firms by public authorities, to limit the impact of lockdown measures. We develop a simple theoretical framework based on a partial-equilibrium model to simulate the liquidity and solvency stress faced by a large panel of French firms and assess the impact of government support. Simulation results suggest that those policies helped healthy but illiquid firms to withstand the shock caused by the pandemic. Moreover, the analysis finds no evidence of a "zombification effect", as less productive companies did not disproportionately benefit from government support.

Keywords: Covid-19; zombie firms; job-retention; schemes; microsimulation; policy evaluation (search for similar items in EconPapers)
Date: 2024
Note: View the original document on HAL open archive server: https://hal.science/hal-04384037
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Published in Journal of Economic Behavior and Organization, 2024, 218, pp.263-280. ⟨10.1016/j.jebo.2023.12.013⟩

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Related works:
Journal Article: Zombification of the economy? Assessing the effectiveness of French government support during COVID-19 lockdown (2024)
Working Paper: The Zombification of the Economy? Assessing the Effectiveness of French Government Support during Covid-19 Lockdown (2024)
Working Paper: Zombification of the economy? Assessing the effectiveness of French government support during COVID-19 lockdown (2024)
Working Paper: Zombification of the economy? Assessing the effectiveness of French government support during COVID-19 lockdown (2024)
Working Paper: The Zombification of the Economy? Assessing the Effectiveness of French Government Support during Covid-19 Lockdown (2022)
Working Paper: The Zombification of the Economy? Assessing the Effectiveness of French Government Support During COVID-19 Lockdown (2022)
Working Paper: The Zombification of the Economy? Assessing the Effectiveness of French Government Support During COVID-19 Lockdown (2022)
Working Paper: The Zombification of the Economy? Assessing the Effectiveness of French Government Support During COVID-19 Lockdown (2022)
Working Paper: The Zombification of the Economy? Assessing the Effectiveness of French Government Support During COVID-19 Lockdown (2022)
Working Paper: The Zombification of the Economy? Assessing the Effectiveness of French Government Support During COVID-19 Lockdown (2022)
Working Paper: The Zombification of the Economy? Assessing the Effectiveness of French Government Support During COVID-19 Lockdown (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:spmain:hal-04384037

DOI: 10.1016/j.jebo.2023.12.013

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