Performance of Firms Using COVID-19-related Support Policies: Ex-post evaluation

This study presents evidence on the business performance of firms up to FY2023 that used three major support policies during the COVID-19 crisis: financial assistance, the employment adjustment subsidy, and the business sustainability subsidy. The results show, first, that although productivity among firms that received support improved compared to levels immediately following the crisis, it remained low even after the pandemic subsided. Second, mean wages of firms that received financial assistance or the sustainability subsidy returned to their pre-COVID-19 levels, while wages of firms that used the employment subsidy remained low as of FY2023. Third, by FY 2023, employment levels declined among firms that used the support measures, compared to those that did not. Fourth, the probability of survival in FY2023 was lower for firms that used the support measures, suggesting that the effectiveness of these policies was limited. However, the support measures did not appear to hinder the market’s selection mechanism, whereby less productive firms exit the market.