Drivers, impacts and interrelationships of cantonal policies and firm behaviour during the pandemic years in Switzerland

The goal of this project is to better understand and to quantify the interactions between Swiss federal and cantonal health and economic policies during the Covid-19 pandemic and their impacts on the well-being of firms in Switzerland. We collect and analyse data on non-pharmaceutical measures and fiscal support policies to analyse the type and speed of reactions of cantonal governments to the local health crisis. We will measure behavioural changes of different population groups in response to the health measures using mobility data. We will identify the determinants of different policies using panel-econometric methods that deal with direct and indirect spatial effects while controlling for time-location fixed effects.We will also evaluate the impacts of cantonal fiscal Covid-19 policies on firm expectations, survival, and other measures of firm well-being. We aim to disentangle supply- from demand-side effects by exploiting spatial and time variation in fiscal support. For example, the design of the federal credit program introduced exogenous variation in loan supply across cantons. There is also variation in the timing, size, and beneficiary sectors of cantonal fiscal support measures and differences in the sectoral composition of cantonal production networks.These analyses will enable us to improve our understanding of the mechanisms behind and the consequences of the Swiss federal system on firm outcomes. The goal of the project is to offer guidance to policymakers on how to improve policymaking in crises situations to preserve prosperity and welfare as much as possible in future crises while minimizing state expenditures and avoid unintended side effects.