State subsidies and their impact on business

Abstract

The effect of market regulation tools on business is a complex phenomenon, and the impact of such regulation could be both positive and negative. The enhancement of the positive effect is a scientific task which requires a systematic approach. In order to find a solution to this problem it is necessary: a) to identify the relevant factors; b) to make a coherent evaluation of these factors and their influence on the phenomenon under investigation; c) to establish the optimal form and extent of the SRB (State Regulation of Business) tool required for the achievement of the desired results. The study analyses aims of economic regulation and business management from the point of view of a state. The research focuses on problems caused by state subsidies for business enterprises as one of the forms of SRB. The research also aims to enhance the effectiveness of business regulation. The main objects of this study are: state subsidies for business enterprises as a form of state intervention in the market and the possible correlation between the characteristics of subsidies and their impact on business. The evaluation presented in this study proved that EU subsidies have had a direct positive influence on the expected effect. The analysis revealed that rate of subsidies has had a higher effect on SRB impact than the size of funding.