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Government Interventions to Ameliorate COVID-19 Recession: The Case of Small, Micro, and Medium Firm’s Survival in South Africa

Author

Listed:
  • S. Zhou

    (,‡Department of Business Management, University of Zululand, South Africa)

  • T. Chimucheka

    (��Department of Business Management, University of Fort Hare, South Africa)

  • A. O. Ayandibu

    (,‡Department of Business Management, University of Zululand, South Africa)

  • M. Masuku

    (�School of Built Environment and Development Studies, University of KwaZulu-Natal, South Africa)

Abstract

This paper analyzes the impact of government economic interventions to ameliorate the COVID-19 pandemic on the survival of small, micro, and medium enterprises (SMMEs) in South Africa. We use the Cox Proportional Hazards approach and cross-sectional data from King Cetshwayo District Municipality covering 641 SMMEs. The study finds that tax relief was the most important intervention used to sustain SMMEs during the pandemic. Other interventions, such as cash grants and cheap credit, were also used during the period but had a small impact. Our findings support the interventions used by the South African government in mitigating the negative consequences of the pandemic-induced lockdown on small businesses. However, we also note that the magnitude at which the interventions were made could have been lower than what is optimal. The paper recommends the need to increase and have sustainable targeted expenditure during the difficult times to enhance the resilience of SMMEs to accelerate economic development and growth.

Suggested Citation

  • S. Zhou & T. Chimucheka & A. O. Ayandibu & M. Masuku, 2023. "Government Interventions to Ameliorate COVID-19 Recession: The Case of Small, Micro, and Medium Firm’s Survival in South Africa," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 14(01), pages 1-21, February.
    • Handle: RePEc:wsi:jicepx:v:14:y:2023:i:01:n:s1793993323500059
    DOI: 10.1142/S1793993323500059
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    More about this item

    Keywords

    Cash grants; COVID-19 pandemic; government intervention; SMMEs survival;
    All these keywords.

    JEL classification:

    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O23 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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