Results of a Firm Survey after the Spread of COVID-19 in Japan
(Revised) Firms' Responses and Policy Measures to the COVID-19 Pandemic: An analysis based on a firm survey

Author Name UESUGI Iichiro (Faculty Fellow, RIETI) / ONO Arito (Chuo University) / HONDA Tomohito (University of Tokyo) / ARAKI Shota (Fellow (Policy Economist), RIETI) / UCHIDA Hirofumi (Kobe University) / ONOZUKA Yuki (Otaru University of Commerce) / KAWAGUCHI Daiji (Faculty Fellow, RIETI) / TSURUTA Daisuke (Nihon University) / FUKANUMA Hikaru (Japan Finance Corporation) / HOSONO Kaoru (Faculty Fellow, RIETI) / MIYAKAWA Daisuke (Hitotsubashi University) / YASUDA Yukihiro (Hitotsubashi University) / YAMORI Nobuyoshi (Faculty Fellow, RIETI)
Creation Date/NO. June 2021 21-J-029
Research Project Study Group on Corporate Finance and Firm Dynamics
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First draft: June 2021
Revised: February 2022


This paper provides a detailed account of firms' behavior during the COVID-19 pandemic. In particular, using the “Survey on the Status of Firms under the COVID-19 Pandemic” conducted by the Research Institute of Economy, Trade and Industry (RIETI) in November 2020, which received responses from about 5,000 companies that mostly comprise small and medium-sized enterprises, the paper overviews the damages suffered by firms, the responses they took, and the financial support measures they used. It also examines the attributes of firms that used the support measures. Taking advantage of the fact that some of the firms surveyed also responded to the firm survey conducted during the Global Financial Crisis (GFC) in 2009, we also focus on the differences between the GFC and the COVID-19 pandemic.

There are four major findings: (1) Many firms were damaged by a decline in sales to customer firms and consumers since the start of the COVID-19 pandemic. Many of them coped with the damage mainly by taking out new loans from financial institutions and by giving a leave of absence to employees. (2) The percentage of firms whose financing conditions worsened during the COVID-19 pandemic was about the same as during the GFC, while the percentage of firms whose financing conditions were severe was higher. This indicates that some firms had severe cash flow problems even before the shock. (3) For many of the support measures, firms with low credit scores before the COVID-19 pandemic tended to use them more frequently than those with high scores. This tendency was the strongest for the interest-free and unsecured concessional loans extended by government financial institutions. (4) The share of zombie firms that were unable to continue their businesses without support from financial institutions or the government varies across different definitions of zombies. However, the share is not always higher during the COVID-19 pandemic than it was during the GFC for all the zombie definitions. The share of these zombie firms that used government support measures was higher than that of non-zombies. We observe this tendency both during the GFC and the COVID-19 pandemic.

Published: Uesugi, Ichiro, Arito Ono, Tomohito Honda, Shota Araki, Hirofumi Uchida, Yuki Onozuka, Daiji Kawaguchi, Daisuke Tsuruta, Hikaru Fukanuma, Kaoru Hosono, Daisuke Miyakawa, Yukihiro Yasuda, and Nobuyoshi Yamori, 2022. "Firms' responses and policy measures to the COVID-19 pandemic -An analysis based on a firm survey-," The Economic Review, Volume 73, No. 2 (2022), 133-159.