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Can Government Policy Influence Industrial Competitiveness: Evidence from Poland and the Czech Republic

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Author Info

  • Iraj Hashi

    (Staffordshire University, Stoke on Trent, U.K.)

  • Darko Hajdukovic

    (Royal Holloway College, University of London, U.K.)

  • Erjon Luci

    (Bank of Albania, Tirana, Albania)

Abstract

Government intervention in support of a particular firm or industry has generally been justified on the grounds of market failure. Theoretical and empirical developments in the last thirty years, particularly the concepts of ‘regulatory capture’, ‘government failure’ and ‘intergovernmental competition’, have significantly weakened the case for government intervention. We use data on the population of three-digit industries in the 1996/97-2003 period to develop a model in which industrial competitiveness is affected by a range of industry-specific factors including government policy instruments. The initial results seem to confirm the view of the sceptics that policy intervention through taxes and subsidies do not improve the performance of the sector as a whole.

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Bibliographic Info

Article provided by Faculty of Economics and Business, University of Zagreb in its journal Zagreb International Review of Economics and Business.

Volume (Year): 8 (2005)
Issue (Month): 2 (November)
Pages: 1-22

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Handle: RePEc:zag:zirebs:v:8:y:2005:i:2:p:1-22

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Related research

Keywords: competitiveness; market failure and government failure; intergovernmental competition; state aid;

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Cited by:
  1. Xiaoqiang Cheng & Patrick VAN CAYSEELE, 2010. "State Aid and Competition in Banking: The Case of China in the Late Nineties," Working Papers id:2435, eSocialSciences.
  2. Vladimír Benáček & Jiří Podpiera & Ladislav Prokop, 2006. "Command Economy after the Shocks of Opening up: The Factors of Adjustment and Specialisation in the Czech Trade," Working Papers IES 2006/20, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Apr 2006.

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