Equilibrium Effects of Firm Subsidies

• 成果类型: Article
• 署名作者: Rotemberg, Martin
• 署名单位: New York University
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.20171840
• 发表日期: 2019
• 页码: 3475-3513
• 关键词: aggregate productivity; trade liberalization; Causal Inference; IMPACT; GROWTH; constraints; COMPETITION; spillovers; finance; DESIGN

摘要

Subsidy programs have two countervailing effects on firms: direct gains for eligible firms and indirect losses for those whose competitors are eligible. In 2006, India changed the eligibility criteria for small-firm subsidies, and the sales of newly eligible firms grew by roughly 35 percent. Competitors of the newly eligible firms were affected, with almost complete crowd-out within products that were less internationally traded, but little crowd-out for more-traded products. The newly eligible firms had relatively high marginal products, so relaxing the eligibility criteria for subsidies increased aggregate productivity by around 1-2 percent. Targeting different firms could have led to similar gains.