Governmental Revenue Compensation during COVID-19: Did Firm Resources and Institutional Factors Explain Who Received It?

Abstract

During COVID-19, the Norwegian Government provided compensation to amend firms’ decreased revenues, yet it should be neutral and tailored to losses only. However, firm resources or institutional factors may have influenced the compensation, which we study here. Survey data showed a high probability of compensation among large firms, although they were not hit particularly hard by COVID-19. Also, compensation was prevalent for firms in the hospitality, tourism, and culture industry, and a likely explanation is that they were hit hard. However, their probability of compensation was prevalent compared to firms in other industries, regardless of revenue losses. We assume that large firms’ compensation was due to their resources to apply for funding successfully, while institutional factors explained the compensation for firms in the hospitality, tourism, and culture industry.

Keywords

• COVID-19
• revenue compensation
• industry analysis
• liability of smallness
• balancing data
• matching