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The search returned 9 results.

The Effectiveness of R&D&I Subsidies to Young Innovative Companies in Belgium journal article

Diego Andres Olaya Lasso, Caroline Buts

European State Aid Law Quarterly, Volume 17 (2018), Issue 2, Page 177 - 191

Innovation is of crucial importance in modern knowledge and information driven economies. Small and medium-sized enterprises (SMEs) are relatively dynamic and thus essential in the generation of inventions. However, SMEs’ innovative performance is not uniform and a particularly interesting subgroup has been identified: Young Innovative Companies (YICs). While YICs’ favourably influence also the macroeconomic competitiveness of a country, little research has been carried out regarding the effects of diverse support policies. This article hence aims to contribute to the literature by examining the role of subsidies on the innovative performance of YICs. We build a dataset of all Belgian companies and monitor firm level microdata from 2010 until 2015. The empirical analysis aims, in a first stage, to identify the population of YICs in Belgium and the main industries where they operate. In a second phase, we then evaluate whether YICs have a superior innovative performance relative to other types of businesses and especially whether support policies have been effective in stimulating their innovations. From the negative binomial model, we conclude that subsidies prove to be an essential policy instrument favouring the creation of inventions by YICs. It is important for policy to promote and support YICs’ entrepreneurship before as well as during their way towards innovation. Keywords: Innovation; Subsidy; R&D; Young Innovative Company; Count Models.


Manufacturing in Small Peripheral Island States: Where is the Level Playing Field? journal article

Caroline Buts, Phedon Nicolaides

European State Aid Law Quarterly, Volume 16 (2017), Issue 2, Page 272 - 275

While many islands can be attractive tourist destinations, other parts of the economy often face serious challenges that are the direct result of natural and permanent handicaps. Small islands encounter difficulties in attracting and maintaining manufacturing activities. Additional transport costs as well as the absence of economies of scale and low connectivity can result in investment decisions on the mainland, rather than the island. Multiple policies exist to help islands balance out the disadvantage of being remote, small or sparsely populated. Nevertheless, the State aid rules treat small and remote islands differently, depending on whether they are a region or a Member State. After briefly reviewing the main difficulties encountered by islands, we study the case of Malta. Next, the relevant State aid rules are evaluated, revealing inconsistencies and the need for revisions with important consequences for Malta and Cyprus. Keywords: Regional State Aid; Peripheral Islands; Island States; Transport Costs; Industrial Base.


Is There a Role for Economic Analysis When Deciding on State Aid to Public Broadcasters? journal article

Caroline Buts, Mychal Langenus, Karen Donders

European State Aid Law Quarterly, Volume 16 (2017), Issue 4, Page 537 - 558

By means of text analysis, this article examines the use of economic concepts and tools in State aid decisions regarding public broadcasters. We find that broad and general concepts are most frequently used and that more specific economic terms that can be found in the Broadcasting Communication surface rather seldomly in the public version of decision texts. Furthermore, we do not observe a substantial difference between the use of these terms before and after the adoption of the v2009 Broadcasting Communication suggesting that economic concepts are not more frequently used in recent years. We believe that economic analysis could bring additional clarity and support in several of the studied decisions, especially in cases where, for example, it is quite debatable which tasks fall under a public service obligation and which do not. Economic analysis would foster the evolution to a stricter and more rational State aid control in this exceptional sector preventing potential spillover-effects of aid into new activities. Keywords: State Aid; Media; Public Service Broadcasting; Economic Analysis.



Evaluating Restructuring Aid: a Case Study Approach journal article

Caroline Buts, Jean-François Romainville, Valentijn Bilsen

European State Aid Law Quarterly, Volume 15 (2016), Issue 3, Page 338 - 356

When a firm in difficulty has no remaining market options to attempt restructuring and regaining viability, there is the possibility that a government chooses to intervene by means of a rescue and/or a restructuring aid. While this is clearly considered to constitute one of the most distortive types of State aid, rescue and restructuring aid can be allowed in very specific circumstances. At EU level, those circumstances are set out in guidelines on State aid for rescuing and restructuring non-financial undertakings in difficulty. Building upon, among others, insights and results gained throughout the conduct of a study for the European Commission (DG Competition), this article evaluates restructuring aid decisions (excluding the financial sector) from 2003 until 2012 by means of a case study approach. The contribution of this study is twofold. First, the results of the article shed light on the effectiveness and efficiency of restructuring aid procedures and outcomes. Second, we report on the advantages and limitations of the qualitative methodology used, which constitutes a crucial complement to econometric analyses and forms an essential part of any proper ex-post aid evaluation. Keywords: Restructuring Aid; Ex-post Evaluation; Case Studies.



On the Longer-Term Effects of State Aid on Market Shares journal article

Patricia Coppens, Katharina Hilken, Caroline Buts

European State Aid Law Quarterly, Volume 14 (2015), Issue 2, Page 271 - 279

This article discusses the effect of State aid on competition covering a 6-year horizon. Subsidies have a positive effect on market shares within a 2-year time frame, as documented earlier by Buts and Jegers. While one would suppose the effect to diminish over time, we find that the opposite is true. Even after six years, subsidies still have a positive influence on market shares. Taking total subsidies over 6 years into account, market shares are significantly impacted which suggests that competition might be distorted. Up until recently, European State aid control focused on the ex ante evaluation of proposed measures. This article emphasizes the importance of ex post evaluations, studying multiple indicators (positive as well as negative effects of the aid) and especially covering a longer term horizon. Although first effects show after 2 years, the changes in market shares increase and therefore additional evaluations regarding the distortion of competition are useful at different points in time. Keywords: subsidies; competition; market shares


State Aid Policy in the EU Member States journal article

Caroline Buts, Tony Joris, Marc Jegers

European State Aid Law Quarterly, Volume 12 (2013), Issue 2, Page 330 - 340

It’s a Different Game They Play

The European Union is almost the only international organisation with a system of State aid control. The main reasons for the existence of this system are ensuring a level playing field within the EU internal market, avoiding subsidy races between EU Member States and preserving economic and social welfare. Despite this EU system of control and a WTO agreement documenting a wider international consensus to limit State aid, large amou


Does State Aid Create Jobs? The Short and Mid-Term Employment Effects of Subsidies journal article

Caroline Buts, Marc Jegers

European State Aid Law Quarterly, Volume 12 (2013), Issue 4, Page 651 - 658

This article looks at the aggregate effect of subsidies to Belgian firms on their levels of employment. It appears that firms receiving high subsidies experience a significantly higher increase in employment (FTE) than firms not receiving subsidies. This effect becomes visible about two years after the subsidies have been granted. This result sheds a more positive light on the employment effects of State aid than most of the previous studies focusing solely on aid mea

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