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

Author Name MORIKAWA Masayuki (President, RIETI)
Creation Date/NO. February 2021 21-P-006
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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.

This is the English version of the Japanese Discussion Paper (20-P-031) with some additional information and changes.

Published: Morikawa, Masayuki, 2021. "Productivity of firms using relief policies during the COVID-19 crisis," Economics Letters, Volume 203, 109869.