Micro-economic effects of public funds on enterprises in Hungary

Györgyi Nyikos, Attila Béres and Tamás Laposa

Regional Studies, Regional Science, 2020, vol. 7, issue 1, 346-361

Abstract: To enhance the effectiveness of and return on public investments, using financial instruments in addition to grants has lately become an increasingly preferred policy instrument choice in Central and Eastern Europe. The paper examines the impact different financial tools bring about at a micro-level. This enables recommendations for policy-makers to be produced on the type of assistance that could be of best use to improve access to finance for micro-, small and medium-sized enterprises, and thus achieve long-term, sustainable economic growth. The analysis is based on counterfactual evaluation and difference-in-differences. The findings indicate that the use of European Union funds (both grants and financial instruments) has a beneficial influence on employment and sales. However, the results also illustrate that in order to achieve the goal of higher impact and certain productivity effects, subsidies should be allocated to the initially less productive small firms in the less developed regions. Another important outcome is that, to some extent, financing through financial instruments has more direct relevance to advanced productivity, and due to their revolving nature, they generate more positive impact on the Hungarian economy than do grants.

Date: 2020
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/21681376.2020.1805351 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:rsrsxx:v:7:y:2020:i:1:p:346-361

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/rsrs20

DOI: 10.1080/21681376.2020.1805351

Access Statistics for this article

Regional Studies, Regional Science is currently edited by Alasdair Rae

More articles in Regional Studies, Regional Science from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().