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

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URL:	https://ub-madoc.bib.uni-mannheim.de/40996
URN:	urn:nbn:de:bsz:180-madoc-409967
Document Type:	Working paper
Year of publication:	2016
The title of a journal, publication series:	ZEW Discussion Papers
Volume:	16-035
Place of publication:	Mannheim
Publication language:	English
Institution:	Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series:	Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject:	330 Economics
Classification:	JEL: C41 , D62 , D73 , G33 , G38 , H23 , L52 , L98 , O52,
Keywords (English):	Government policy , state aid , ex-post evaluation , survival , European Union
Abstract:	We estimate the causal impact of restructuring aid granted by the European Commission between 2003 and 2012 on the survival and financial viability of aided firms. Using a comprehensive dataset we find that restructuring aid increases a firm’s average survival time by 8 to 15 years and decreases the hazard rate by 58 to 68 percent, depending on the definition of firm survival. Further analysis finds strong support that, in the longer run, aid receiving firms have a significantly higher probability to improve their financial viability than the counterfactual group.