The impact of product subsidies on plant‐level total factor productivity in Britain, 1997–2014

Richard Harris () and John Moffat

Scottish Journal of Political Economy, 2020, vol. 67, issue 4, 387-403

Abstract: The United Kingdom’s imminent departure from the European Union provides the opportunity for a more selective industrial strategy. This paper therefore analyses the effect of product subsidies on productivity in British manufacturing plants between 1997 and 2014 in order to provide evidence on the desirability of extending their use. The results suggest that low rates of subsidization had either a positive or no effect but higher rates had a negative effect on total factor productivity in some sectors. This implies that increasing the generosity of subsidies does not offer a means of improving the UK’s productivity performance.

Date: 2020
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https://doi.org/10.1111/sjpe.12240

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Persistent link: https://EconPapers.repec.org/RePEc:bla:scotjp:v:67:y:2020:i:4:p:387-403

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