 State Aid for Industrial Enterprises in Belarus: Remedy or Poison?EERC Working Paper Series from EERC Research Network, Russia and CIS Abstract: In this paper the impact of various types of state aid on aggregate productivity growth in Belarusian manufacturing is investigated by combining the data on government support with firm-level accounting data for period 1998-2007. Obtained results indicate that the state aid provided for restructuring truly leads to the modernization of the enterprises (capital-to-labor ratio grows), that this modernization leads to an increase in effectiveness (TFP grows, especially at large enterprises), and that this growth of TFP allows the newly restructured enterprises to raise their market share which results in the growth of the allocative efficiency. However, when the state aid is provided to support enterprises in financial distress, while it leads to an increase in employment (only for enterprises receiving aid, especially for large enterprises, but not for the total sample) and to an expansion in the market share of large enterprises (not small and medium size), this achievement comes at the expense of the decrease in TFP. JEL-codes: C21 L2 L53 O47 P31 (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eer:wpalle:10/01e Ordering information: This working paper can be ordered from Access Statistics for this paper More papers in EERC Working Paper Series from EERC Research Network, Russia and CIS EERC Research Network, Russia and CIS, 92/94, Dmytrivska Str., suite 404, Kyiv, 01135 Ukraine. |
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