The impact of state aid on the survival and financial viability of aided firms

Author(s)
Sven Heim, Kai Hueschelrath, Philipp Schmidt-Dengler, Maurizio Strazzeri
Abstract

We estimate the causal impact of restructuring aid granted by the European Commission between 2000 and 2012 on the survival and financial viability of aided firms. Using a comprehensive dataset we find that restructuring aid decreases the hazard rate of a market exit by 58–68% and increases firms’ average survival time by 8–15 years, depending on the definition of firm survival. We also find that aid receiving firms have a significantly higher probability to improve their financial viability than the counterfactual group in the longer run.

Organisation(s)
Department of Economics
External organisation(s)
CERNA, Mines ParisTech, MINES ParisTech, Ctr Geosci, Zentrum für Europäische Wirtschaftsforschung (ZEW ), Centre for Economic Policy Research, Ces Ifo, Österreichisches Institut für Wirtschaftsforschung (WIFO), Universität Konstanz
Journal
European Economic Review
Volume
100
Pages
193-214
No. of pages
22
ISSN
0014-2921
DOI
https://doi.org/10.1016/j.euroecorev.2017.08.005
Publication date
11-2017
Peer reviewed
Yes
Austrian Fields of Science 2012
Public finance, Structural policy, Economic policy
Keywords
Portal url
https://ucris.univie.ac.at/portal/en/publications/the-impact-of-state-aid-on-the-survival-and-financial-viability-of-aided-firms(69819d0e-8fc0-4998-a27d-b7e90dec9936).html