This is an evaluation study which examines the financing process through which Finnish enterprises apply and receive business subsidies from the central government. It examines comprehensively the three entities involved when this type of state aid is distributed in Finland, namely the applicant enterprises, the projects financed and the distributors of funds. It demonstrates how quantitative methods can be used to monitor and evaluate state aid to enterprises. In the study the distributor is the Ministry of Trade and Industry (KTM). The material is gathered from data found in state aid applications by enterprises located in industrially declining areas (European Structural Funds Objective 2 areas) in the prefectures of Varsinais-Suomi and Päijät-Häme during 1995-96. The study focuses upon the characteristics of the applicant enterprises and the projects financed. It also includes performance measurements of different financing operations by the KTM. Furthermore, by building logistic regression models, it examines the factors that influence the KTM in deciding whether to finance or not a state aid application. Results indicate (a) that there are no clear differences between enterprises which receive aid and those which do not and (b) that each KTM office applies to some extent its own financing procedures. Recommendations based on this study include (1) the standardization of the selection methods of enterprises, (2) the better utilization of the databases, (3) the creation of a flexible and targeted system of state aid where final beneficiaries are clearly defined, (4) the creation of a follow-up system to measure and evaluate the impact of the state aid, (5) imposing restrictions as to how often the same enterprises can be granted aid and (6) the introduction of an alternative type of aid in the form of forgivable loans.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by Government Institute for Economic Research Finland (VATT) in its series Research Reports with number
58.
Length: Date of creation: 01 Jan 1999 Date of revision: Handle: RePEc:fer:resrep:58
Contact details of provider: Postal: Arkadiankatu 7, P.O. Box 1279, FI-00101 Helsinki Phone: +358 40 304 5500 Fax: +358 9 4780 2929 Email: Web page: http://www.vatt.fi/ More information through EDIRC
Order Information: Email:
For technical questions regarding this item, or to correct its listing, contact: (Anita Niskanen).
Find related papers by JEL classification: C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - General M21 - Business Administration and Business Economics; Marketing; Accounting - - Business Economics - - - Business Economics O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)