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Impotence of Crisis-Motivated Subsidization of Firms: The Case of Slovenia

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  • Anže Burger
  • Matija Rojec

Abstract

This analysis examines the impact of crisis-motivated subsidization of Slovenian firms on their performance during the 2008 recession. Propensity-score matching combined with the difference-in-differences (the DID) approach is applied to estimate the effects of anti-crisis subsidies granted in 2009–2015 on recipient firms’ sales and employment. To control for other factors determining firms’ growth during the recession, the DID regression method was applied. An insignificant impact of anti-crisis subsidies on revenue and positive effects on employment of subsidized firms was found. Positive effects identified are generated by state aid schemes that are not primarily aimed at alleviating the crisis.

Suggested Citation

  • Anže Burger & Matija Rojec, 2018. "Impotence of Crisis-Motivated Subsidization of Firms: The Case of Slovenia," Eastern European Economics, Taylor & Francis Journals, vol. 56(2), pages 122-148, March.
    • Handle: RePEc:mes:eaeuec:v:56:y:2018:i:2:p:122-148
    DOI: 10.1080/00128775.2017.1416294
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    Cited by:

    1. Stjepan Srhoj & Bruno Škrinjarić & Sonja Radas, 2021. "Bidding against the odds? The impact evaluation of grants for young micro and small firms during the recession," Small Business Economics, Springer, vol. 56(1), pages 83-103, January.
    2. Bearzotti, Enia & Polanec, Sašo & Bartolj, Tjaša, 2023. "The Effects of Subsidies on Firm Size and Productivity," MPRA Paper 118490, University Library of Munich, Germany.
    3. Stojčić, Nebojša & Srhoj, Stjepan & Coad, Alex, 2020. "Innovation procurement as capability-building: Evaluating innovation policies in eight Central and Eastern European countries," European Economic Review, Elsevier, vol. 121(C).
    4. Stjepan Srhoj & Michal Lapinski & Janette Walde, 2021. "Impact evaluation of business development grants on SME performance," Small Business Economics, Springer, vol. 57(3), pages 1285-1301, October.
    5. Stjepan Srhoj & Michael Lapinski & Janette Walde, 2019. "Size matters? Impact evaluation of business development grants on SME performance," Working Papers 2019-14, Faculty of Economics and Statistics, Universität Innsbruck.
    6. Yanfeng Lou & Yezhuang Tian & Kai Wang, 2020. "The Spillover Effect of US Industrial Subsidies on China’s Exports," Sustainability, MDPI, vol. 12(7), pages 1-12, April.

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