A Granular Examination of the Impact of the Health Crisis and the Public Support Measures on French Companies’ Financial Situation

Abstract

– We develop a microsimulation model fed by a particularly rich set of individual data in order to assess the impact of the health crisis on the financial situation of more than 645,000 French companies in 2020. We show that the relative stability in net debt at the macroeconomic level is concealing major disparities on an individual level. Heterogeneity is particularly significant between sectors (before and after public support measures) but is also present within each sector. Our simulations confirm the need for public intervention during the crisis: a mere adjustment in company behaviour is insufficient to absorb the shock. These support measures brought the share of firms with a negative cash flow shock in line with normal years, although “extrem” cash flow shocks occur more frequently than usual. One important lesson learned from this exercise is that sector and size cannot be the only criteria taken into account when drawing up crisis recovery policies. © 2022, Institut National de la Statistique et des Etudes Economiques. All rights reserved.