Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/96591
Authors: 
Friederiszick, Hans W.
Tosini, Nicola
Year of Publication: 
2012
Series/Report no.: 
ESMT Working Paper 12-05
Abstract: 
The Regional Aid Guidelines foresee specific screens for an in-depth assessment of Large Investment Projects (LIPs): an in-depth assessment is initiated if the market share of the aid beneficiary is above 25% or the investment results in a capacity expansion above 5% in a declining market. It is currently being discussed within the broader State Aid Modernization package and also due to a recent court ruling on the case Propapier whether these market screens should stay as they are. Based on a dataset of all LIP cases notified under the 2006 Regional Aid Guidelines, we evaluate those market screens and find that the screens do have power to identify problematic cases – cases with a below average expected aid effectiveness and aid measures targeting specific industries. We also find, however, that the market screens are affected by a severe implementation problem and, hence, do not help to shorten phase I investigations. From a conceptual perspective, they are also not capable of identifying some of the potentially most problematic regional State aid cases. Policy options are discussed.
Subjects: 
competition policy
regional state aid
subsidies
anti-competitive effects
JEL: 
H81
L4
O25
R58
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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