Covid-19 Economic Assistance in Bavaria Reached All Affected Industrie
In Bavaria, Covid-19 bridging aid was received mainly by the many smaller companies with fewer than 50 employees and in those industries particularly affected by the pandemic. This is the finding of the ifo Institute’s initial evaluation of this aid as part of a study commissioned by the Chamber of Commerce and Industry (IHK) for Munich and Upper Bavaria. The study assessed seven funding programs with payouts totaling EUR 11.2 billion resulting from more than 300,000 applications. Most of the money went to eateries and hotels, which were among the most affected by pandemic-related closures. These businesses received 40 percent of the total funding, or EUR 4.7 billion. Next came retailers with EUR 1.6 billion and the arts and culture industry with a total of EUR 1.3 billion.
All in all, some 130,000 companies received bridging aid, with companies able to submit multiple applications for different programs and time periods. Around one-third of companies received funding from one form of bridging aid, while just under another third did so from two. Only 2 percent of all companies that received funding applied for all seven of the Covid-19 subsidies evaluated in the study. The average funding total per company was EUR 86,000. However, only one-seventh of the companies received more than EUR 100,000. Indeed, half the companies funded received less than EUR 14,500 in total.
The various forms of Covid-19 economic assistance evaluated in the study reached 98 percent of all businesses in the Bavarian hospitality industry: 38,202 businesses received an average of EUR 125,820 in assistance. In the arts and culture industry, that figure was approximately 80 percent, or 13,709 businesses with an average of EUR 97,132. In trade it was one-fifth, or 18,175 businesses with an average of EUR 87,299. In all other industries, the share of businesses that received funding was considerably smaller.
Manfred Gößl, CEO of the IHK for Munich and Upper Bavaria, says: “The figures show that aid to the affected industries was highly effective. The programs clearly responded to
the course of the pandemic in a timely and seasonally appropriate fashion, thus ensuring the liquidity of businesses facing dire straits.”
As other forms of aid were also available – including tax deferrals, loan guarantees, the Economic Stabilization Fund, the BayernFonds, and expanded options for short-time work – ifo concludes that further studies are required to analyze the full effects of all types of Covid-19 aid. Competition distortions may emerge, especially in those industries where only a handful of businesses received funding, explains Prof. Oliver Falck, coauthor of the study.
As an authorizing body for bridging aid I, II, III, III Plus, and IV, as well as for the November and December aid, the IHK for Munich and Upper Bavaria processed applications submitted by businesses throughout all of Bavaria and provided the ifo Institute with anonymized datasets for scientific analysis. “New start” aid (Neustarthilfe) for the solo self-employed, Bavaria’s October aid, and hardship assistance programs, which the IHK also administered, were not included. During the application phase from 2020 to 2023, the IHK received approximately 445,000 applications as part of 14 funding programs and paid out a total of EUR 11.9 billion.
IHK Press release 07.05.2024
ifo-Studie: Corona-Wirtschaftshilfen erreichten betroffene Branchen umfassend
