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March 1, 2023

Predicting Firm Exits with Machine Learning: Implications for Selection into COVID-19 Support and Productivity Growth

In this paper, we use machine learning techniques to predict whether a company would have left the market in a world without corona. These predictions show that unhealthy companies applied for support less often than healthy companies. But we also show that the COVID-19 support has prevented most exits among unhealthy companies. This indicates that the corona support measures have had a negative impact on productivity growth.

Corona