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. 2020;156(1):15.
doi: 10.1186/s41937-020-00060-y. Epub 2020 Oct 14.

COVID-19 financial support to small businesses in Switzerland: evaluation and outlook

Marius Brülhart  1 , Rafael Lalive  1 , Tobias Lehmann  1 , Michael Siegenthaler  2
Affiliations

COVID-19 financial support to small businesses in Switzerland: evaluation and outlook

Marius Brülhart et al. Swiss J Econ Stat. 2020.

Abstract

We analyse small businesses' recourse to public support measures during the COVID-19 crisis using a survey of 1011 self-employed workers and small business owners in Switzerland. We find that "objective" measures of lockdown affectedness and economic structure explain fairly well how businesses availed of support measures to cover labour costs. Recourse to government-backed corona loans, however, appears to be driven to a larger extent by behavioural idiosyncrasies across firms. Specifically, previously indebted businesses took out corona loans more readily than those who had been debt-free before the pandemic. Since uptake is not well in line with firm fundamentals, we propose making loan repayments contingent on future profits. This will more effectively target and sustain businesses that are in trouble today but would be viable in the absence COVID-19.

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Conflict of interest statement

Competing interestsNot applicable

Figures

Fig. 1
Fig. 1
Reported loss of turnover and recourse to support measures
Fig. 2
Fig. 2
Determinants of the use of support measures (illustration of estimated coefficients). The graphs show coefficient estimates and 95% confidence intervals as reported in column (5) of Tables 2, 3 and 4
See this image and copyright information in PMC

References

    1. Alós-Ferrer, Carlos, et al. (2020) Coronavirus: testing and freezing – a survival strategy for the Swiss economy. Mimeo: Department of Economics, University of Zurich.
    1. Bonardi, Jean-Philippe, Marius Brülhart, Jean-Pierre Danthine, Eric Jondeau and Dominic Rohner (2020) The economics of wage compensation and corona loans: why and how the state should bear most of the economic cost of the COVID lockdown. VoxEU.org.
    1. Brown, Martin, Matthias Fengler, Rafael Lalive, Robert Rohrkemper and Thomas Spycher (2020) Monitoring consumption in Switzerland. Online Dashboard monitoringconsumption.org.
    1. Brülhart, Marius, Monika Bütler, Luca Crivelli, David Dorn, Jan-Egbert Sturm and Beatrice Weder (2020a) Public matching payments for commercial rent abatements during the COVID crisis. Policy Brief, Swiss National Covid-19 Science Task Force.
    1. Brülhart, Marius, Jeremias Klaeui, Rafael Lalive, Tobias Lehmann and Michael Siegenthaler (2020b). Covid Survey: Die Schweizer Selbständigerwerbenden in der Covid19-Pandemie. Mimeo: University of Lausanne and ETH Zürich.

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