The differential effects of prevention and restrictive policies in crises: What can we learn from the COVID‐19 pandemic?

Abstract This study aims to investigate the impact of lockdown and vaccination policies on business confidence in Europe, offering insights for future pandemic responses. Our research confirms that vaccination significantly boosts business confidence and mitigates the negative effects of lockdowns. We also find that stricter lockdown measures have a greater impact on businesses than their relaxation. Our study contributes to the literature by showing that vaccination can serve as an informational update, reducing uncertainty and stabilizing economic expectations. The study also highlights the importance of considering psychological factors when designing policies.