Measuring the Extent of European State Aid Control: An Econometric Analysis of the European Commission Decisions

54 Pages Posted: 13 Oct 2010

See all articles by Erik Brouwer

Erik Brouwer

Tilburg Law and Economics Center (TILEC)

Fatih Cemil Ozbugday

Ankara Yildirim Beyazit University - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: October 11, 2010

Abstract

This paper provides an analysis of the European Commission (EC) decisions on state aid control using data on 550 state aid cases approved by the EC between 1998 and 2009. More specifically, we measure the determinants of the duration of state aid, total budget of state aid and daily budget of state aid. By using these imperfect proxies, we try to identify the extent of European state aid control. Our results suggest that aid with multiple objectives to achieve has both longer durations and higher amounts of budget. We also find that for some aid objectives or industries, the EC approves cases of aid with both longer durations and higher levels of budget. On the other hand, for some class of aid objectives and industries, there is a trade-off between duration and the level of budget so as to counter-balance the undesired effects. The interpretation of the results imply that the European state aid control, which once was originally intended to address concerns about export subsidies and strategic trade, recently puts more emphasis on market failures mostly associated with externalities and public goods.

Keywords: European competition policy, state aid, survival analysis, quantile regression analysis

JEL Classification: L49, L59, K21

Suggested Citation

Brouwer, Erik and Ozbugday, Fatih Cemil, Measuring the Extent of European State Aid Control: An Econometric Analysis of the European Commission Decisions (October 11, 2010). TILEC Discussion Paper No. 2010-037. Available at SSRN: https://ssrn.com/abstract=1690473 or http://dx.doi.org/10.2139/ssrn.1690473

Erik Brouwer (Contact Author)

Tilburg Law and Economics Center (TILEC) ( email )

Warandelaan 2
Tilburg, 5000 LE
Netherlands

Fatih Cemil Ozbugday

Ankara Yildirim Beyazit University - Department of Economics ( email )

Cicek St. No 1 Ulus
Sciences Yildirim Beyazit University
Ankara, 06500
Turkey

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