State Aid for Industrial Enterprises in Belarus: Remedy or Poison?
In this paper the impact of various types of state aid on aggregate productivity growth in Belarusian manufacturing is investigated by combining the data on government support with firm-level accounting data for period 1998-2007. Obtained results indicate that the state aid provided for restructuring truly leads to the modernization of the enterprises (capital-to-labor ratio grows), that this modernization leads to an increase in effectiveness (TFP grows, especially at large enterprises), and that this growth of TFP allows the newly restructured enterprises to raise their market share which results in the growth of the allocative efficiency. However, when the state aid is provided to support enterprises in financial distress, while it leads to an increase in employment (only for enterprises receiving aid, especially for large enterprises, but not for the total sample) and to an expansion in the market share of large enterprises (not small and medium size), this achievement comes at the expense of the decrease in TFP.
|Date of creation:||06 Nov 2010|
|Contact details of provider:|| Postal: EERC Research Network, Russia and CIS, 92/94, Dmytrivska Str., suite 404, Kyiv, 01135 Ukraine|
Web page: http://www.eercnetwork.com
|Order Information:|| Postal: EERC Research Network, Russia and CIS, 92/94, Dmytrivska Str., suite 404, Kyiv, 01135 Ukraine|
Web: https://eercnetwork.com/paper Email:
References listed on IDEAS
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.:
- Irina Tytell & Ksenia Yudaeva, 2005.
"The Role of FDI in Eastern Europe and New Independent States: New Channels for the Spillover Effect,"
w0060, Center for Economic and Financial Research (CEFIR).
- Irina Tytell & Ksenia Yudaeva, 2006. "The Role of FDI in Eastern Europe and New Independent States: New Channels for the Spillover Effect," Development Working Papers 217, Centro Studi Luca d'Agliano, University of Milano.
- Mario Mariniello, 2006. "State Aid to Attract FDI and the European Competition Policy: Should Variable Cost Aid Be Banned?," Economics Working Papers ECO2006/41, European University Institute.
- Richard Harris & Catherine Robinson, 2004. "Industrial Policy In Great Britain And Its Effect On Total Factor Productivity In Manufacturing Plants, 1990-1998," Scottish Journal of Political Economy, Scottish Economic Society, vol. 51(4), pages 528-543, 09.
- Greetje Everaert, 2003. "The Political Economy of Restructuring and Subsidisation: An International Perspective," LICOS Discussion Papers 13003, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
- Ricardo J. Caballero & Mohamad L. Hammour, 2000. "Institutions, Restructuring, and Macroeconomic Performance," NBER Working Papers 7720, National Bureau of Economic Research, Inc.
- Ricardo J. Caballero & Mohamad L. Hammour, 2001. "Institutions, Restructuring and Macroeconomic Performance," DELTA Working Papers 2001-03, DELTA (Ecole normale supérieure).
- Ann E. Harrison & Brian J. Aitken, 1999. "Do Domestic Firms Benefit from Direct Foreign Investment? Evidence from Venezuela," American Economic Review, American Economic Association, vol. 89(3), pages 605-618, June.
- Gual, Jordi & Jodar, Sandra, 2006. "Vertical industrial policy in the EU: an empirical analysis of the effectiveness of state aid," EIB Papers 10/2006, European Investment Bank, Economics Department.
- Marco Caliendo & Reinhard Hujer, 2006. "The microeconometric estimation of treatment effects—An overview," AStA Advances in Statistical Analysis, Springer;German Statistical Society, vol. 90(1), pages 199-215, March.
- Caliendo, Marco & Hujer, Reinhard, 2005. "The Microeconometric Estimation of Treatment Effects - An Overview," IZA Discussion Papers 1653, Institute for the Study of Labor (IZA).
- J. Kornai & E. Maskin & G. Roland., 2004. "Understanding the Soft Budget Constraint," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 12.
- János Kornai & Eric Maskin & Gérard Roland, 2003. "Understanding the Soft Budget Constraint," Journal of Economic Literature, American Economic Association, vol. 41(4), pages 1095-1136, December.
- J. Kornai & E. Maskin & G. Roland., 2004. "Understanding the Soft Budget Constraint," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 11.
- Janos Kornai & Eric Maskin & Gerard Roland, 2002. "Understanding the Soft Budget Constraint," Economics Working Papers 0019, Institute for Advanced Study, School of Social Science.
- David Roodman, 2009. "A Note on the Theme of Too Many Instruments," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 71(1), pages 135-158, 02.
- David Roodman, 2007. "A Note on the Theme of Too Many Instruments," Working Papers 125, Center for Global Development.
- Lucia Foster & John C. Haltiwanger & C. J. Krizan, 2001. "Aggregate Productivity Growth: Lessons from Microeconomic Evidence," NBER Chapters,in: New Developments in Productivity Analysis, pages 303-372 National Bureau of Economic Research, Inc.
- John Haltiwanger & C J Krizan & Lucia Foster, 1998. "Aggregate Productivity Growth: Lessons From Microeconomic Evidence," Working Papers 98-12, Center for Economic Studies, U.S. Census Bureau.
- Lucia Foster & John Haltiwanger & C.J. Krizan, 1998. "Aggregate Productivity Growth: Lessons from Microeconomic Evidence," NBER Working Papers 6803, National Bureau of Economic Research, Inc.
- Olley, G Steven & Pakes, Ariel, 1996. "The Dynamics of Productivity in the Telecommunications Equipment Industry," Econometrica, Econometric Society, vol. 64(6), pages 1263-1297, November.
- G. Steven Olley & Ariel Pakes, 1992. "The Dynamics of Productivity in the Telecommunications Equipment Industry," NBER Working Papers 3977, National Bureau of Economic Research, Inc.
- George S Olley & Ariel Pakes, 1992. "The Dynamics Of Productivity In The Telecommunications Equipment Industry," Working Papers 92-2, Center for Economic Studies, U.S. Census Bureau.
- Marina Kesner-Skreb & Ivana Plese & Mia Mikic, 2003. "State Aid to enterprises in Croatia in 2001," Occasional paper series 18, Institute of Public Finance.
- Johannes Van Biesebroeck, 2007. "ROBUSTNESS OF PRODUCTIVITY ESTIMATES -super-," Journal of Industrial Economics, Wiley Blackwell, vol. 55(3), pages 529-569, 09.
- Johannes Van Biesebroeck, 2004. "Robustness of Productivity Estimates," NBER Working Papers 10303, National Bureau of Economic Research, Inc.
- Zhu, Pingfang & Xu, Weimin & LUNDIN, Nannan, 2006. "The impact of government's fundings and tax incentives on industrial R&D investments--Empirical evidences from industrial sectors in Shanghai," China Economic Review, Elsevier, vol. 17(1), pages 51-69.
- 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.
- Philippe Aghion & Evguenia Bessonova, 2006. "On Entry and Growth: Theory and Evidence," Revue de l'OFCE, Presses de Sciences-Po, vol. 97(5), pages 259-278. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:eer:wpalle:10/01e. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Anton Pashchenko)
If references are entirely missing, you can add them using this form.