• Publication information

    30 Mar 2022

    46 Pages (PDF/EN)

    ISBN: 978-92-861-5235-1 (PDF/EN)

    DOI: 10.2867/19683

    • Related tags

    • EGF
    • covid-19
    • investment
    • Economics
    • Research, innovation and technology
    • SMEs
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Description

The sudden onset of the COVID shock has left European economies reeling, resulting in a sudden contraction of demand that has hit some vulnerable firms and sectors in a remarkably uneven way.

There is a genuine interest from policymakers to learn about which types of firms have been left in vulnerable circumstances as a result of the crisis. In this paper, we present new evidence on the evolution of investment plans of certain groups of firms suspected of being vulnerable -young and small firms, High-Growth Enterprises (HGEs) and R&D investors. We applied a difference-in-differences approach on panel data regarding forward-looking investment expectations.

The results show that all the vulnerable groups are pessimistic about the availability of internal and external finance, with HGEs suddenly expecting less of a positive change in investment, and R&D investors expecting a negative change in investment.