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Aiding Car Producers in the EU: Money in Search of a Strategy

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  • Marcella Nicolini

    ()

  • Carlo Scarpa

    ()

  • Paola Valbonesi

    ()

Abstract

This article investigates how the general principles of the Treaty have been applied to the car sector in the EU, where the soft law provisions are of particular interest. A detailed quantitative analysis from 1990 to 2008 highlights a reduction of aid over time. A shift from sectoral to “regional development” motives in granting aid to the sector is also observed in the last 10 years. However, sector specific aid is now less explicit but it remains important. Large amounts of public money are spent without a consistent strategy, reducing capacity in some cases, expanding it in others. The scarcity of public funds calls for a more focussed European policy for this industry. Copyright Springer Science+Business Media New York 2013

Suggested Citation

  • Marcella Nicolini & Carlo Scarpa & Paola Valbonesi, 2013. "Aiding Car Producers in the EU: Money in Search of a Strategy," Journal of Industry, Competition and Trade, Springer, vol. 13(1), pages 67-87, March.
  • Handle: RePEc:kap:jincot:v:13:y:2013:i:1:p:67-87
    DOI: 10.1007/s10842-012-0146-5
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    References listed on IDEAS

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    1. Pasquale Schiraldi, 2011. "Automobile replacement: a dynamic structural approach," RAND Journal of Economics, RAND Corporation, vol. 42(2), pages 266-291, June.
    2. Grigolon, Laura & Leheyda, Nina & Verboven, Frank, 2012. "Public support for the European car industry: An integrated analysis," ZEW Discussion Papers 12-077, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    3. Luger,Stan, 2000. "Corporate Power, American Democracy, and the Automobile Industry," Cambridge Books, Cambridge University Press, number 9780521631730.
    4. Marcella Nicolini & Carlo Scarpa & Paola Valbonesi, 2012. "State Aid to Business in the European Union: a Focus on the Car Sector," DEM Working Papers Series 001, University of Pavia, Department of Economics and Management.
    5. Patrizio Bianchi & Sandrine Labory (ed.), 2006. "International Handbook on Industrial Policy," Books, Edward Elgar Publishing, number 3451.
    6. Timothy Besley & Paul Seabright, 1999. "The effects and policy implications of state aids to industry: an economic analysis," Economic Policy, CEPR;CES;MSH, vol. 14(28), pages 13-53, April.
    7. Thomas H. Klier & James M. Rubenstein, 2008. "Who really made your car?," Chicago Fed Letter, Federal Reserve Bank of Chicago, issue Oct.
    8. Brander, James A. & Spencer, Barbara J., 1985. "Export subsidies and international market share rivalry," Journal of International Economics, Elsevier, vol. 18(1-2), pages 83-100, February.
    9. Collie, David R., 2000. "State aid in the European Union: The prohibition of subsidies in an integrated market," International Journal of Industrial Organization, Elsevier, vol. 18(6), pages 867-884, August.
    10. Martin Stephen & Valbonesi Paola, 2008. "Equilibrium State Aid in Integrating Markets," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 8(1), pages 1-39, August.
    11. Thomas Klier & James Rubenstein, 2008. "Who Really Made Your Car? Restructuring and Geographic change in the Auto Industry," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number wrmyc, November.
    12. Stephen Martin & Paola Valbonesi, 2006. "State Aid to Business," Chapters,in: International Handbook on Industrial Policy, chapter 7 Edward Elgar Publishing.
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    Citations

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    Cited by:

    1. Grigolon, Laura & Leheyda, Nina & Verboven, Frank, 2012. "Public support for the European car industry: An integrated analysis," ZEW Discussion Papers 12-077, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    2. Hussein Kassim & Bruce Lyons, 2013. "The New Political Economy of EU State Aid Policy," Journal of Industry, Competition and Trade, Springer, vol. 13(1), pages 1-21, March.
    3. Hagen Streb, 2013. "State Aid Policy, Territoriality and Federalism: EU Scrutiny and Control of Regional Aid and the Supranationalisation of Subnational Autonomy in Federal Member States," Journal of Industry, Competition and Trade, Springer, vol. 13(1), pages 129-141, March.
    4. Michael Blauberger & Rike Krämer, 2013. "European Competition vs. Global Competitiveness Transferring EU Rules on State Aid and Public Procurement Beyond Europe," Journal of Industry, Competition and Trade, Springer, vol. 13(1), pages 171-186, March.
    5. Laura Grigolon & Nina Leheyda & Frank Verboven, 2015. "Public Support to the European Car Industry: The Impact of the Financial Crisis," Journal of Industry, Competition and Trade, Springer, vol. 15(3), pages 283-321, September.
    6. Ben Clift, 2013. "Economic Patriotism, the Clash of Capitalisms, and State Aid in the European Union," Journal of Industry, Competition and Trade, Springer, vol. 13(1), pages 101-117, March.

    More about this item

    Keywords

    automotive industry; state aid to business; EU competition policy; L62; L52; L40;

    JEL classification:

    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General

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