Determinants of State Aid
AbstractFrom economic theory we derive a set of hypotheses on the determination of state aid. Econometric analysis on EU state aid panel data is carried out to test whether the determinants we expect on the basis of theory, correspond to the occurrence of state aid in practice in the EU. We find that political and constitutional characteristics play a significant role in explaining differences in state aid across EU countries. In addition, there are indications that the unilateral incentive for governments to provide state aid – to improve the position of its exporting firms against international competitors – is still in effect in practice, despite the presence of EU state aid control aimed at reducing this unilateral incentive and pursuing the EU’s joint interest. The estimation results however provide indicative information that state aid control is effective.
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Bibliographic InfoPaper provided by Tilburg University, Tilburg Law and Economic Center in its series Discussion Paper with number 2010-005.
Date of creation: 2010
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state aid; subsidies; intergovernmental competition; constitutions; political economics; econometrics;
Find related papers by JEL classification:
- D62 - Microeconomics - - Welfare Economics - - - Externalities
- H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
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- Meyer, Jenny, 2008. "The Adoption of New Technologies and the Age Structure of the Workforce," ZEW Discussion Papers 08-045, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Tim Mazzarol & Sophie Reboud, 2005. "Customers as Predictors of Rent Returns to Innovation and Small Firms – an exploratory study," Post-Print hal-00472438, HAL.
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