Wirkungen der Investitionsförderung in Ostdeutschland

Joachim Ragnitz

No 186/2003, IWH Discussion Papers from Halle Institute for Economic Research (IWH)

Abstract: Investment in East Germany is heavily subsidized. Econometric estimates based on a treatment approach show that the level of investment is significantly higher in firms being supported by state aid. Nevertheless, capital productivity is lower in East Germany, indicating a misallocation of capital. Additionally, there are negative effects in West Germany due to negative crowding-out effects. Therefore state aid in East Germany should be reduced in the medium run.

JEL-codes: O52 R11 R38 R58 (search for similar items in EconPapers)
Date: 2003
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Citations: View citations in EconPapers (7)

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