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Targeting State Aid: Firm-level Evidence from France

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  • Xun Li
  • Maryam Vaziri

Abstract

This paper examines the firm-level impact of state aid in France from 2016–23 and how targeting affects economic outcomes. Using firm-level data and a difference-in-differences approach, we find that aid is most effective for young firms, improving real outcomes while also crowding in private debt financing. Size-based targeting, by contrast, has limited impact. R&D support is particularly effective for young firms in high-tech sectors, and energy aid has the strongest effects in manufacturing, pointing to its potential role in helping firms reduce emissions and facilitating the green transition.

Suggested Citation

  • Xun Li & Maryam Vaziri, 2026. "Targeting State Aid: Firm-level Evidence from France," IMF Working Papers 2026/122, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2026/122
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