According to the study, the government aids had some positive effects on the industries most heavily affected by the first lockdown. However, this may not be sufficient to significantly increase the probability of survival of the affected businesses. Due to government support, the probability of economic survival for trade fair and conference organizers or for travel agents has increased by more than 30 percent. However, this is still below the 60 percent mark.
In addition, the study shows that state aid had little to no effect in industries which were less affected by the crisis, such as agriculture and state-owned companies. At the beginning of November, the government announced new state aids to help businesses. For example, the government compensates businesses for up to 75 % of their turnover in November 2019. “However, the data show significant differences in costs structures, even within the industries hit again by the lockdown. For some companies, it is very easy to reduce costs flexibly at short notice. They benefit greatly from the regulation to reimburse the standard amount of 75 percent of the turnover. Other companies have fixed cost structures, for example due to longterm contracts”, says Professor Jannis Bischof, holder of the Chair of Business Administration and Accounting and co-author of the study. The current reimbursement regulation could be detrimental to these businesses and may not be sufficient to ensure their economic survival. However, these are the businesses that usually show high social responsibility towards their employees.
Another result of the study is related to the reduced value-added tax. The data show that in many heavily affected industries, the reduced value-added tax did not trigger a drop in consumer prices. In many industries, companies have even increased their prices. Nevertheless: “Due to the reduced value-added tax, the price increases may be smaller, so that the consumer and, in the end, the companies benefit from the reduction”, says Professor Philipp Dörrenberg, another co-author of the study and holder of the Chair of Business Administration and Taxation.
To read a summary of the study, please go to: https://www.accounting-for-transparency.de/wp-content/uploads/2020/11/gbp_ergebnisbericht_november_2020.pdf
To go to the website of the GBP, please click here: https://www.gbpanel.org/