EU and State Grants Distribution in the Czech Republic: The Effect of Political Connections
|Author:||Mgr. Martin Kopeček|
|Year:||2019 - summer|
|Leaders:|| PhDr. Miroslav Palanský M.A.
|Work type:|| Finance, Financial Markets and Banking
|Awards and prizes:|
|Abstract:||This thesis is divided into two parts. The first part analyses recently published data from the
Central Grant Registry (CEDR) on state grant distribution in Czechia between 1999 and the
present year. In the second part, I link this data to information on political connections
established through donations to parties and examine whether politically connected firms are
more successful in competing for state grants. I match the donating firms to non-donating but
otherwise similar firms using propensity scores based on a number of observable
characteristics. The results indicate that donating companies have a 40% higher success rate in
receiving state grants compared to non-donating firms. I find that the effect is higher for grants
from the state budget than for grants from EU funds, which is consistent with EU-funded grants
being subject to stricter regulations.