Исследовательский Центр ИПМ
Kasrtyčnicki Ekanamičny Forum
 Irina Kolesnikova

State Aid to Enterprises in Belarus as an Instrument of Manufacture Policy: Analyses of Efficiency

This paper is aimed to investigate the impact of state aid on aggregate productivity growth in Belarusian manufacturing. The lack of a counterfactual and due to selection bias complicates the making of the measurement. Specifically, the selection bias arises because recipients of state aid can differ from the firms that do not receive aid in other dimensions. In order to avoid this problem, a set of instrumental variables that explicitly allow for selection on unobservable variables is proposed. The empirical results carried out in the paper suggest that aid has had a negative impact on the static allocative efficiency.