Subsidies and Other Government Support Programs
Subsidies are monetary or other resources that a government grants to a firm or group of firms, intended either to encourage exports or simply to facilitate the production and marketing of products at reduced prices, to help ensure that the involved companies prosper. Subsidies come in the form of outright cash disbursements, material inputs, services, tax breaks, the construction of infrastructure, and government contracts at inflated prices. For example, the French government has provided large subsidies to Air France, the national airline.
Exhibit 7.5 displays the countries with the most government-owned firms active in international business. These state-owned multinational enterprises (SOMNEs) ...
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