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The Effects of Regional Capital Subsidies on Productivity Growth: A Case Study of the Greek Food and Beverage Manufacturing Industry

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  • Dimitris Skuras
  • Kostas Tsekouras
  • Efthalia Dimara
  • Dimitris Tzelepis

Abstract

. Capital subsidies form a major instrument of industrial and regional policy for economically developed countries all over the world, including many European Union and Organisation for Economic Cooperation and Development countries. Research findings have challenged the effectiveness of capital subsidies in assisting productivity growth. This paper treats capital subsidies as a new input and estimates a stochastic production frontier that is not bound by the restrictions imposed by approaches used in previous research works. It is shown that capital subsidies affect total factor productivity growth through technical change and not through scale efficiency, while the disadvantaged location of firms affects technical efficiency.

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  • Dimitris Skuras & Kostas Tsekouras & Efthalia Dimara & Dimitris Tzelepis, 2006. "The Effects of Regional Capital Subsidies on Productivity Growth: A Case Study of the Greek Food and Beverage Manufacturing Industry," Journal of Regional Science, Wiley Blackwell, vol. 46(2), pages 355-381, May.
    • Handle: RePEc:bla:jregsc:v:46:y:2006:i:2:p:355-381
    DOI: 10.1111/j.0022-4146.2006.00445.x
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    References listed on IDEAS

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    1. Daskalopoulou, Irene & Skuras, Demetrios & Psaltopoulos, Demetrios, 2000. "Regional Development Policy And The Location Of Manufacturing Industry: A Greek Case Study," ERSA conference papers ersa00p206, European Regional Science Association.
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