Quantifying the role of state enterprises in industrial subsidies
The growing participation of state enterprises in industrial supply chains raises
concerns over the implications for global markets of the subsidies that some of these
companies receive. New firm-level evidence from the OECD MAGIC database shows that
state enterprises are relatively larger recipients of industrial subsidies than their
private competitors. They can also benefit from indirect government support, such
as favourable treatment under competition rules and government procurement. Despite
these advantages, evidence indicates that state enterprises in manufacturing tend
to underperform financially. The report provides unprecedented evidence about the
role certain state enterprises play as providers of subsidies, such as when providing
financing and inputs to other firms at below-market prices. The analysis concludes
by describing the implications of these findings for trade rules and the governance
of state-owned enterprises.
Published on June 24, 2024
In series:OECD Trade Policy Papersview more titles