Impotence of Crisis-Motivated Subsidization of Firms: The Case of Slovenia

Anže Burger and Matija Rojec

Eastern European Economics, 2018, vol. 56, issue 2, 122-148

Abstract: This analysis examines the impact of crisis-motivated subsidization of Slovenian firms on their performance during the 2008 recession. Propensity-score matching combined with the difference-in-differences (the DID) approach is applied to estimate the effects of anti-crisis subsidies granted in 2009–2015 on recipient firms’ sales and employment. To control for other factors determining firms’ growth during the recession, the DID regression method was applied. An insignificant impact of anti-crisis subsidies on revenue and positive effects on employment of subsidized firms was found. Positive effects identified are generated by state aid schemes that are not primarily aimed at alleviating the crisis.

Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:mes:eaeuec:v:56:y:2018:i:2:p:122-148

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DOI: 10.1080/00128775.2017.1416294

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