Abstract
Since 2002, the Slovak government have been using the system of investment aid for enterprises. However, the economy of the Slovak Republic characterized by differences among regions. Therefore, in March 2018, the Slovak government modified the system of investment aid to mitigate the differences among the regions. The main aim of the paper is to examine whether investment aid in Slovakia has served its purpose and was channelled to disadvantaged Slovak areas. The objects of the research are particular investment projects supported by the state investment aid in the observed period. The subjects of study are the selected forms of investment aid provided in the Slovak republic. The paper analyses the amount and structure of the provided investment aid in the Slovak Republic during the period 2002–2018. The secondary data on business entities, which received investment aid was obtained from the Ministry of Economy of the Slovak Republic. An additional source of information is data from the Statistical Office of the Slovak Republic about the rate of unemployment and GDP per capita in the Slovak regions. Descriptive statistics and comparison analyse the obtained data to evaluate the total provided investment aid.The authors work with three research questions. The first concerned the uniformity of investment aid provision during the years 2002-2018. The second focused on verifying the proportionality of the covered costs to the newly created jobs. Finally, the authors test the primary mission of investment aid, reducing regional disparities (based on the allocation of investment aid to regions of the Slovak Republic). There were identified evident differences in the total amount of provided investment aid in particular years. The analysis confirms that the costs for one newly created job in particular Slovak regions were quite different. There were regions where the subsidies for one new job were three times higher than in others. During the analysed period, the majority (56%) of investments were realised in regions with a lower rate of unemployment compared to the average price in Slovakia. The aid in these regions was achieved, with 75 % of the total amount of investment aid. The results of the analysis confirm that investment aid in Slovakia is still not focused on the support of less developed regions. Keywords: investment aid, Slovak Republic, state support, regions, unemployment rate.
Highlights
As many economic topics, the issue of providing of investment aid is widely discussed due to contradictory opinions among politics as well as professionals
In order to fulfil the aim of the paper, the authors have set out research questions: 1. Was the regional investment aid allocated to the projects proportionally during the analysed period 2002-2018 according to the amount of investment aid? 2
Regional investment aid represents a secure tool of support for enterprises and their domestic and foreign initial investments
Summary
The issue of providing of investment aid is widely discussed due to contradictory opinions among politics as well as professionals. Opponents criticize its use, mainly because of the distortion of natural competition by favouring selected (supported) enterprises at the expense of other entrepreneurs and the public. (Collie, 2005; Friederiszick et al, 2008; Holscher et al, 2017) When processing this article, the effectiveness was selected as the main criterion measured through selected economic and social indicators. The paper examines the use of investment aid in Slovakia for the period 2002-2018 to assess how effective it was spent. The local investment aid is one of the leading government's tools to primarily mitigate and, at best, prevent the widening differences in the socio-economic development of the country's regions
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