State Aid Measures for Companies in the COVID-19 Crisis

In response to the COVID-19 crisis, the government created a set of instruments to support businesses, which is being adapted on an ongoing basis. Based on the survey sample of the COVID-19 special survey of the WIFO-Konjunkturtest (business cycle survey) from February 2021, we analyse the affectedness, liquidity constraints, use and assessments of the impact of government support measures for businesses in the second wave of the COVID-19 pandemic. The results show (i) that although most firms reported significant disruptions in their operations over the past three months, liquidity assessments have changed only slightly compared to August 2020. However, there is also a slight polarisation in liquidity assessments. This may also be attributable to the impact of government aid measures, as (ii) the use of aid is high, especially in the hard-hit sectors, and is related to companies' liquidity assessments and (iii) the impact of selected government countermeasures is assessed more favourably by companies in hard-hit sectors and by companies that report having used the aid than on average in the survey sample. Companies that continue to face severe financing constraints, however, assess the instruments more frequently as helpful but insufficient. Overall, however, the study results suggest that the government measures were targeted and had the intended effects and that there was no systematic misallocation. Companies with severe liquidity constraints continue to face difficulties. Challenges for economic policy are discussed based on the study findings.