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Measuring the Extent of European State Aid Control: An Econometric Analysis of the European Commission Decisions

Fatih Cemil Ozbugday () and Erik Brouwer

Sosyoekonomi Journal, 2016, issue 24(30)

Abstract: This paper provides an analysis of the European Commission (EC) decisions on state aid control using data on 550 state aid cases approved by the EC between 1998 and 2009. We measure the determinants of the duration of state aid, total budget of state aid and daily budget of state aid. By using these imperfect proxies, we try to identify the extent of European state aid control. Our results suggest that aid with multiple objectives to achieve has both longer durations and higher amounts of budget. We also find that for some aid objectives or industries, the EC approves cases of aid with both longer durations and higher levels of budget. On the other hand, for some class of aid objectives and industries, there is a trade-off between duration and the level of budget to counter-balance the undesired effects. The interpretation of the results implies that the European state aid control, which once was originally intended to address concerns about export subsidies and strategic trade, recently puts more emphasis on market failures mostly associated with externalities and public goods.

Keywords: State Aid Control; Europe; Duration Analysis; Quantile Regression. (search for similar items in EconPapers)
JEL-codes: H25 K21 L40 L50 (search for similar items in EconPapers)
Date: 2016
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http://dergipark.gov.tr/download/article-file/230718

Related works:
Working Paper: Measuring the Extent of European State Aid Control: An Econometric Analysis of the European Commission Decisions (2011) Downloads
Working Paper: Measuring the Extent of European State Aid Control: An Econometric Analysis of the European Commission Decisions (2011) Downloads
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