Alina Urazbayeva presented the study "Estimating the Effectiveness of Public Policy to Promote Entrepreneurship during the Covid-19 Pandemic: Regional Perspective".
Recent stylized facts from Russia reported that the COVID-19 pandemic and COVID-related restrictions led to a sharp decline in the total revenues of Russian MSMEs and a slight decrease in the entrepreneurial intentions of Russian citizens. Against this background, government support for MSMEs played a crucial role in business sustainability during the crisis. Authors of this study are motivated to assess the impact of government policies on the growth of nascent firms in the case of Russian regions during the COVID-induced crisis. To address the high heterogeneity of Russian regions in terms of MSME density and self-isolation during COVID-19, and to account for different effects of the crisis on MSMEs of different sizes and legal forms, researchers built fixed effects models on the monthly panel data from January 2019 to January 2022 for 83 Russian regions. The empirical results suggest that the group of MSMEs most affected by the COVID-19 pandemic are micro-enterprises, regardless of their legal form. Given the positive effect of government support on the growth of micro-enterprises even outside a pandemic crisis and their vulnerability, consistent government support measures should be prioritized over emergency stimulus packages. The study also shows that micro-enterprises were systematically undersupported during the pandemic, resulting in a decline in their number. So the study has several important policy implications for regional governments.
