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Analysis of Subsidies in the Private Sector on the Enterprise Basis


  • Jiří Pšenčík
  • Jindřiška Kouřilová
  • Jaroslav Sedláček


The aim of the paper is to analyze the transfer of financial flows of subsidies and taxes between the state and the beneficiary. In this respect, the topic deals with the return cash flow from the recipient to the state budget, the impact of taxes and VAT rates. The result is a compilation of mathematic models that allow quantification of the positive cash flow from the point of view of the funded entities and reflection-induced flows resulting from tax collection back to the state budget. Specifically, financial flows between the state and a sample of business entities in agriculture, which is a sector with significant endowments, were calculated as an example. The amount of reverse flow to the providers of financial subsidies (so-called hidden subsidies) was derived from the investment and operating subsidies in the model. An individual tax multiplier for differences in VAT rates was calculated as well.

Suggested Citation

  • Jiří Pšenčík & Jindřiška Kouřilová & Jaroslav Sedláček, 2010. "Analysis of Subsidies in the Private Sector on the Enterprise Basis," Acta Oeconomica Pragensia, University of Economics, Prague, vol. 2010(5), pages 58-71.
  • Handle: RePEc:prg:jnlaop:v:2010:y:2010:i:5:id:317:p:58-71

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    More about this item


    VAT; cash flow; subsidy; mathematical models; investment subsidy; operating subsidy; individual tax multiplier; indirect taxes; excise tax; income tax; corporate and individuals;

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics


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