The Global Crisis and the Subsidies to Manufacturing Firms

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Abstract

The 2008-2009 global crisis has severely affected the world economy. Most national governments utilized fiscal policy measures including subsidies to reinforce and sustain their economies. In this study we examine the impact of the 2008-2009 global crisis on subsidies paid to manufacturing firms either by their governments or the European Union (i.e. EU). Our results indicate that, overall, a significantly larger proportion of firms had received subsidies after the global crisis. When we look into different subgroups, we find that firm size, female ownership, female management, and quality certification did not matter (more firms in all of these subgroups had received subsidies). On the other hand, our results demonstrate that firm type and top manager’s experience level made a difference in terms of subsidies received after the crisis.

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