“The relevance of business-tailored government support for foreign affiliates during crises: The case of the COVID-19 pandemic”, Andreja Jaklič and Iris Koleša (CIR, Slovenia)

To mitigate the immediate and long-term effects of the Covid-19 pandemic on businesses and the economy, and to accelerate recovery, many countries and governments have adopted a range of Covid-19 emergency measures for businesses (at times co-designed by businesses themselves). Recent studies show that the speed, variety, and use of these measures are linked to national recovery and economic growth. Small countries in crisis are particularly sensitive to recovery measures available to both domestic and foreign firms. This chapter focuses on Covid-19 emergency government support for foreign affiliates in a small CEE economy (i.e. Slovenia). It first provides an overview of measures available to companies immediately after the pandemic was declared. It then shows how affiliates of multinational enterprises (MNEs) perceive and evaluate different types of government support in their host country and how they use and integrate emergency measures into their recovery plans. The findings offer rare insights into the propensity and ability of foreign affiliates to benefit from national support measures as well as into how foreign affiliate support can contribute to the recovery of small economies. 

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