How are firms affected by the corona crisis? Is the German governments’ support effective? The German Business Panel recently conducted its first survey and received responses of more than 9.500 firms about the effectiveness of Germany’s corona aid. The survey shows that German state aid reaches those firms that need it, nonetheless firms need to take additional measures to survive.
The German state adopted an economic stimulus package worth 130 billion euros. But how was the package of measures received by individual companies? Which measures were most widely used, and which failed to have the desired effect? We present the main findings of our survey below.
Two-thirds of the firms indicated having applied for government aid. Half of which believe that they would not have survived the crisis without this financial support. Sectors whose profits have been hit hardest by the crisis are more likely to take advantage of state aid. These include travel agencies, restaurants, artists, creative professionals, businesses in the entertainment and recreation companies.
Our data shows that the corona emergency aid (Soforthilfe) has been taken up most frequently. The emergency aid is provided as a one-time, non-repayable grand. It provides the short-term liquidity of firms and is intended to bridge the immediate funding shortfalls due to running business costs such as rents, credits for business premises, or leasing instalments. Runners up are the short-time allowance to reduce labor costs and the deferral of tax payments.
The results show that the state aid reached the firms that needed it, but they also show that this help alone is insufficient. Companies had to take additional measures in order to prevent bankruptcy. The following measures were most common:
When focusing on their short-term measures specifically, the following can be derived:
Profit and revenue loss
In our survey we asked the participants to estimate the profit and revenue losses their company experienced due to corona. Whether and to which extent firms have been affected varies across industries:
There is also regional variation in the median values between the different government regions (Regierungsbezirk) in Germany. The district where firms experienced the strongest losses, both profit and revenue, is Oberfranken in Bavaria, perhaps reflecting that it was also one of the regions with the highest prevalence of infections:
The survey on corona was the first survey of our German Business Panel. The aim of the panel is to collect data on topics in the area of financial accounting, managerial accounting and taxation. With more than 9.500 participants, it is a representative panel of managers bearing responsibilities for accounting and tax matters in German firms. Several follow-up studies are already planned, including a survey on tax policy and regulatory changes in the wake of the Corona crisis.
For a more detailed overview of the results of the corona survey please download the executive summary (in German).