- Jul. 6, 2022
- Jul. 5, 2022
- Jun. 28, 2022
Home > Research and Studies > Bank of Japan Working Paper Series, Review Series, and Research Laboratory Series > Bank of Japan Working Paper Series 2021 > (Research Paper) Zombies, Again? The COVID-19 Business Support Programs in Japan
December 30, 2021
We designed and conducted a firm-level survey on the use of COVID-19-related government programs, in collaboration with Tokyo Shoko Research, LTD (TSR). Combining the survey results with the financial statements of the respondent firms, we investigated the factors behind the allocation of various government programs. We find that firms that had low credit scores before the COVID-19 pandemic were more likely to apply for and receive the subsidies and concessional loans offered by the Japanese government in 2020. Firms with low credit scores are not necessarily zombies, which are defined to be the firms that are non-viable but kept alive by assistance from creditors and/or government. Our result suggests that the government assistance may have also subsidized some poorly performing firms that were not yet zombies before the pandemic.
We thank Tasuku Sato, Saisawat Samutpradit, and Ryuji Sugioka for their excellent research assistance, Tokyo Shoko Research, LTD (TSR) for the implementation of the web survey, and Masahiro Odaka and Satoshi Takahashi at the Japan Finance Corporation (JFC) for answering our inquiries regarding the concessional loan programs. We also appreciate comments that we received from Midori Ookawa, Kei Takahashi, Tsutomu Miyagawa, Iichiro Uesugi, and from participants at the macroeconomics workshop at Waseda University, the ABFER Capital Market Development webinar, and the 9th joint conference of the Center for Advanced Research in Finance (CARF) at the University of Tokyo and the Research and Statistics Department at the Bank of Japan. All remaining errors are our own. We acknowledge the financial support from CARF, the grant from Japan Science and Technology Agency (JPMJRX18H3) and the Grants-in-Aid for Scientific Research (Kakenhi 20H00071).
Papers in the Bank of Japan Working Paper Series are circulated in order to stimulate discussion and comments. Views expressed are those of authors and do not necessarily reflect those of the Bank.
If you have any comment or question on the working paper series, please contact each author. When making a copy or reproduction of the content for commercial purposes, please contact the Public Relations Department (email@example.com) at the Bank in advance to request permission. When making a copy or reproduction, the source, Bank of Japan Working Paper Series, should explicitly be credited.