Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/263780 
Year of Publication: 
2022
Series/Report no.: 
CESifo Working Paper No. 9850
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
This paper evaluates the risk of zombification of the French economy during the sanitary crisis, as a result of the unconditional financial support provided to firms by public authorities. We develop a simple theoretical framework based on a partial-equilibrium model to simulate the liquidity and solvency stress faced by a large panel of French firms and assess the impact of government support measures. Simulation results suggest that those policies helped healthy but illiquid firms to withstand the shock caused by the pandemic. Moreover, the analysis finds no evidence of a "zombification effect", as government support has not disproportionately benefited less productive companies.
Subjects: 
Covid-19
zombie firms
job-retention
schemes
microsimulation
policy evaluation
JEL: 
H12
H32
J38
G33
L20
Document Type: 
Working Paper
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