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Characteristics of Government Supported Firms


  • Bergström, Fredrik

    (Dept. of Economics, Stockholm School of Economics)


Governments all over the world grant different types of subsidies to firms which are said to have a lack-of-capital problem. However, it is unclear if governments have the information and motivation to target firms which have problems to finance profitable project via the private capital markets. Based on hypotheses derived from interest group theory, this paper compares (econometrically) characteristics of Swedish firms targeted for selective regional policy supports with randomly chosen non-supported firms. The results give some support for an interest group interpretation of the allocation of subsidies.

Suggested Citation

  • Bergström, Fredrik, 1998. "Characteristics of Government Supported Firms," SSE/EFI Working Paper Series in Economics and Finance 283, Stockholm School of Economics.
  • Handle: RePEc:hhs:hastef:0283

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    References listed on IDEAS

    1. Nash, John, 1953. "Two-Person Cooperative Games," Econometrica, Econometric Society, vol. 21(1), pages 128-140, April.
    2. Young H. P., 1993. "An Evolutionary Model of Bargaining," Journal of Economic Theory, Elsevier, vol. 59(1), pages 145-168, February.
    3. Nash, John, 1950. "The Bargaining Problem," Econometrica, Econometric Society, vol. 18(2), pages 155-162, April.
    4. Young, H Peyton, 1993. "The Evolution of Conventions," Econometrica, Econometric Society, vol. 61(1), pages 57-84, January.
    5. Tore Ellingsen, 1997. "The Evolution of Bargaining Behavior," The Quarterly Journal of Economics, Oxford University Press, vol. 112(2), pages 581-602.
    6. Stahl Dale O., 1993. "Evolution of Smartn Players," Games and Economic Behavior, Elsevier, vol. 5(4), pages 604-617, October.
    7. Hurkens Sjaak, 1995. "Learning by Forgetful Players," Games and Economic Behavior, Elsevier, vol. 11(2), pages 304-329, November.
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    More about this item


    Allocation of subsidies; regional policy; industrial policy; interest group theories;

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H81 - Public Economics - - Miscellaneous Issues - - - Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
    • L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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