This paper investigates the factors behind state aid support in the European Union and its evolution over time. It focusses on the car industry, as the attention captured by this sector in its long history of governments' grants make it an interesting case study. We find that state aid has decreased over time. Economic and political variables are found to significantly affect - at different extent - aid to the car industry. Additionally, our results suggest the presence of a strategic game among countries.
State Aid to Business in the European Union: a focus on the Car Sector
VALBONESI, PAOLA
2012
Abstract
This paper investigates the factors behind state aid support in the European Union and its evolution over time. It focusses on the car industry, as the attention captured by this sector in its long history of governments' grants make it an interesting case study. We find that state aid has decreased over time. Economic and political variables are found to significantly affect - at different extent - aid to the car industry. Additionally, our results suggest the presence of a strategic game among countries.
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