Firm-level policy support during the crisis : so far, so good?

We use the 2021 vintage of the EIB Investment Survey (EIBIS) which contains a detailed set of questions regarding the nature of the policy support to firms during the COVID-19 crisis. Matched with hard data on the balance sheets and Profit and Loss (P&L) statements of corporations, the survey enables to disentangle the drivers of policy allotment and the impact of the policy support during the investment recovery.First, we focus on the distribution of the policy support and show that it has been allotted mostly owing to the sales losses during the crisis, going to firms most affected during the crisis. We do not find evidence that the support was tilted towards firms already weak before the crisis. Second, we show that the firms that have benefitted from the policysupport tend to be more optimistic regarding their investment plans. The impact is especially pronounced for investment in digital technologies.