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State aid and investment: case of Slovakia

Author

Listed:
  • Michal Fabuš

    (Bratislava University of Economics and Management, Slovakia)

  • Marek Csabay

    (Pan-European University, Slovakia)

Abstract

State investment incentives are detrimental to the quality of the business environment and create unequal starting conditions for entrepreneurs to implement investment plans. In some cases, however, it is necessary to regulate the allocation of inward investment to regions within one country and thus decrease the disparities. Investment incentives are instruments that in general might violate market principles and thus are regulated within the EU internal market. Despite being aware of this fact most economists and politicians advocate these kinds of measures as necessary and relatively cheap in order to push the economy forward or win international big private equity investments. Investment aid is regional aid to stimulate investment in disadvantaged regions and to create new jobs in the Slovak Republic. Beneficiaries of this assistance may be natural and legal persons authorized to carry on business in the territory of the Slovak Republic and whose investment activities and projects meet the conditions of Act no. 561/2007 Z.z. on Investment Assistance and on Amendments to Certain Acts. This paper will focus on how investment incentive attracts foreign investment in the Slovak Republic and based on the data from 2002 to 2017 we will analyze their effectiveness on the created jobs. Despite the possible support from the Slovak government not all foreign investors areapplying for investment incentives, either are in contact with the government during their investment phase.

Suggested Citation

  • Michal Fabuš & Marek Csabay, 2018. "State aid and investment: case of Slovakia," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 6(2), pages 480-488, December.
    • Handle: RePEc:ssi:jouesi:v:6:y:2018:i:2:p:480-488
    DOI: 10.9770/jesi.2018.6.2(1)
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    References listed on IDEAS

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    Cited by:

    1. Aneta Bobenič Hintošová & František Sudzina & Terézia Barlašová, 2021. "Direct and Indirect Effects of Investment Incentives in Slovakia," JRFM, MDPI, vol. 14(2), pages 1-12, February.
    2. Aneta Hintošová & Terézia Barlašová, 2021. "The Role Of Investment Promotion Policy In Attracting Foreign Direct Investment: The Case Of Slovakia," Public administration issues, Higher School of Economics, issue 5, pages 27-40.
    3. Judita Táncošová, 2019. "The role of foreign direct investment in the economy of Slovakia," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 6(4), pages 2127-2135, June.
    4. Štefan Bojnec & Sabina Žampa, 2021. "Subsidies and Economic and Financial Performance of Enterprises," JRFM, MDPI, vol. 14(11), pages 1-16, October.
    5. Manuela TVARONAVICIENE, 2019. "Insights Into Global Trends Of Capital Flows’ Peculiarities: Emerging Leadership Of China," REVISTA ADMINISTRATIE SI MANAGEMENT PUBLIC, Faculty of Administration and Public Management, Academy of Economic Studies, Bucharest, Romania, vol. 2019(32), pages 6-17, June.
    6. Waldemar Milewicz, 2020. "The influence of foreign investors on the development of Polish enterprises – a case study of the BPH bank," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 8(2), pages 829-839, December.
    7. Marek Csabay & Zuzana Vincúrová & Milan Stoch & Beáta Stehlíková, 2021. "Enterprise ownership patterns in the least developed districts of Slovakia," Equilibrium. Quarterly Journal of Economics and Economic Policy, Institute of Economic Research, vol. 16(4), pages 807-838, December.

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    More about this item

    Keywords

    investments incentives; stare aid; foreign direct investmnets; economic growth;
    All these keywords.

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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