Quantifying the role of state enterprises in industrial subsidies

Oecd

No 282, OECD Trade Policy Papers from OECD Publishing

Abstract: The growing participation of state enterprises in industrial supply chains raises concerns over the implications for global markets of the subsidies that some of these companies receive. New firm-level evidence from the OECD MAGIC database shows that state enterprises are relatively larger recipients of industrial subsidies than their private competitors. They can also benefit from indirect government support, such as favourable treatment under competition rules and government procurement. Despite these advantages, evidence indicates that state enterprises in manufacturing tend to underperform financially. The report provides unprecedented evidence about the role certain state enterprises play as providers of subsidies, such as when providing financing and inputs to other firms at below-market prices. The analysis concludes by describing the implications of these findings for trade rules and the governance of state-owned enterprises.

Keywords: Bank loans; Competition; Level playing field; Market distorsions; State-owned enterprises (search for similar items in EconPapers)
JEL-codes: F13 F23 H25 H81 O25 (search for similar items in EconPapers)
Date: 2024-06-24
New Economics Papers: this item is included in nep-int
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Persistent link: https://EconPapers.repec.org/RePEc:oec:traaab:282-en

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