Targeting State Aid: Firm-level Evidence from France

Author: Xun Li and Maryam Vaziri

Volume/Issue: Volume 2026 Issue 122

Publication date: June 2026

ISBN: 9798229049764

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Topics covered in this book

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Exports and Imports , Economics- Macroeconomics , Industries - Energy , Industries - Manufacturing , Environmental Conservation and Protection , Industrial policy , firm performance , state aid , energy aid , IMF working papers , evidence from France , firms in high-tech sector , Greenhouse gas emissions , Manufacturing , Energy sector

Also of interest

WORKING PAPERS PUBLISHED IN AUGUST 2005

WORKING PAPERS PUBLISHED IN JULY 2005

WORKING PAPERS PUBLISHED IN DECEMBER 2005

WORKING PAPERS PUBLISHED IN DECEMBER 2004

Summary

This paper examines the firm-level impact of state aid in France from 2016–23 and how targeting affects economic outcomes. Using firm-level data and a difference-in-differences approach, we find that aid is most effective for young firms, improving real outcomes while also crowding in private debt financing. Size-based targeting, by contrast, has limited impact. R&D support is particularly effective for young firms in high-tech sectors, and energy aid has the strongest effects in manufacturing, pointing to its potential role in helping firms reduce emissions and facilitating the green transition.