The Impact of Fiscal Policy on Economic Growth in EU Member States – Perspective of State Aid Granted in the Pre-Pandemic Period

PIOTR PODSIADLO

Abstract

The article presents the conditions of admissibility of state aid in the European
Union from the perspective of the principle of sustainable development, including in particular
the fiscal policy as the basic mechanism for implementing the above principle. A literature
study was conducted based on the achievements of the theory of state intervention and the
theory of market failure. A feature of the research method used is the analysis of the
instruments used by the state in relation to enterprises from the point of view of the definition
of state aid in European Union documents. Another feature of the method used in the work is
the analysis of the relationship between the expenditure of the Member States on state aid
and their economic growth. This analysis was performed based on a linear regression model.
The analysis made it possible to verify the influence of State aid on economic growth in EU
Member States which provided State aid in the years 2000-2019. State expenditure policy,
which includes the policy of state aid to enterprises, can give an impulse to GDP growth and
increase the indicator GDP per capita (growth of competitiveness of the national economy)
even if the State spends more money than the accumulated revenue in the budget.

Keywords

economic growth, the European Union, fiscal policy, state aid, regression analysis

DOI

https://doi.org/10.18267/pr.2024.vol.2512.13

 

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