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Productivity of Firms Using Relief Policies During the COVID-19 Crisis

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  • Morikawa, Masayuki

Abstract

Based on an original survey of Japanese firms, this study presents an overview of the characteristics of firms that used policy measures to mitigate the negative impacts of the COVID-19 pandemic, with an emphasis on the assessment of pre-pandemic productivity. According to the results, many firms are taking advantage of financial support programs, employment assistance subsidies, and subsidies to sustain businesses. The productivity of firms using these support measures was found to be lower than that of non-user firms prior to the pandemic, suggesting that low-productivity firms have been affected seriously by the crisis. The policy implication is that relief policies under the recent COVID-19 crisis should be temporary and such policies should be modified to enable the smooth reallocation of resources.

Suggested Citation

  • Morikawa, Masayuki, 2021. "Productivity of Firms Using Relief Policies During the COVID-19 Crisis," SSPJ Discussion Paper Series DP20-006, Service Sector Productivity in Japan: Determinants and Policies, Institute of Economic Research, Hitotsubashi University.
    • Handle: RePEc:hit:sspjdp:dp20-006
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    Cited by:

    1. Fischer, Kai & Reade, J. James & Schmal, W. Benedikt, 2022. "What cannot be cured must be endured: The long-lasting effect of a COVID-19 infection on workplace productivity," Labour Economics, Elsevier, vol. 79(C).
    2. Telegdy, Álmos, 2024. "The effects of enterprise relief grants during COVID-19," Economics Letters, Elsevier, vol. 234(C).
    3. Masayuki Morikawa, 2023. "Productivity and wages of firms using COVID‐19‐related support policies," Social Science Quarterly, Southwestern Social Science Association, vol. 104(3), pages 202-213, May.
    4. Konstantins Benkovskis & Olegs Tkacevs & Karlis Vilerts, 2024. "Understanding How Job Retention Schemes Reshape the Within-Occupation Skill Profile of Employees within Firms," Working Papers 2024/02, Latvijas Banka.
    5. Bighelli, Tommaso & Lalinsky, Tibor & Vanhala, Juuso, 2023. "Cross-country evidence on the allocation of COVID-19 government subsidies and consequences for productivity," Journal of the Japanese and International Economies, Elsevier, vol. 68(C).
    6. Zofia Gródek-Szostak & Jadwiga Adamczyk & Małgorzata Luc & Marcin Suder & Justyna Tora & Karolina Kotulewicz-Wisińska & Wojciech Zysk & Anna Szeląg-Sikora, 2022. "Hard Cash in Hard Times—The Effect of Institutional Support for Businesses Shaken by COVID-19," Sustainability, MDPI, vol. 14(8), pages 1-18, April.
    7. Meriküll, Jaanika & Paulus, Alari, 2024. "Were jobs saved at the cost of productivity in the COVID-19 crisis?," European Economic Review, Elsevier, vol. 161(C).
    8. Honda, Tomohito & Hosono, Kaoru & Miyakawa, Daisuke & Ono, Arito & Uesugi, Iichiro, 2023. "Determinants and effects of the use of COVID-19 business support programs in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 67(C).
    9. Ahmad, Wasim & Kutan, Ali M. & Chahal, Rishman Jot Kaur & Kattumuri, Ruth, 2021. "COVID-19 Pandemic and firm-level dynamics in the USA, UK, Europe, and Japan," International Review of Financial Analysis, Elsevier, vol. 78(C).
    10. Barbakadze, I., 2023. "With a Little Help from My Friend: Political Connections and Allocation of COVID-19 Aid," Cambridge Working Papers in Economics 2355, Faculty of Economics, University of Cambridge.
    11. TSURUTA Daisuke, 2024. "Determinants and Consequences of Bank Borrowings of Small Businesses: Is the COVID-19 crisis special?," Discussion papers 24007, Research Institute of Economy, Trade and Industry (RIETI).
    12. Hoshi, Takeo & Kawaguchi, Daiji & Ueda, Kenichi, 2023. "Zombies, again? The COVID-19 business support programs in Japan," Journal of Banking & Finance, Elsevier, vol. 147(C).
    13. Meriküll, Jaanika & Paulus, Alari, 2023. "The impact of the Covid-19 job retention support on employment," Economics Letters, Elsevier, vol. 222(C).
    14. Kotone Yamada & Yukio Minoura & Jouchi Nakajima & Tomoyuki Yagi, 2023. "Corporate Finance Facility and Resource Allocation: Research Trends and Developments during the Spread of COVID-19," Bank of Japan Working Paper Series 23-E-1, Bank of Japan.
    15. Török, Ádám & Konka, Boglárka & Nagy, Andrea Magda, 2023. "A koronavírus-járvány a közgazdasági szakirodalomban. Egy új határterület tudománymetriai elemzése [The coronavirus pandemic in the economics literature. The scientometric analysis of a new discipl," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(3), pages 284-304.

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    More about this item

    Keywords

    COVID-19; firm support policies; productivity; cleansing effect; reallocation effect;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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