Any action undertaken by state authorities consisting in granting aid, in any form whatsoever, to an individual entrepreneur or to a group of entities, which distorts competition on the market. In the EU State aid is regulated in Art. 107 and 108 TFEU. The following premises must be met (jointly) to reach a finding that we are dealing with incompatible State aid: (1) A measure is an aid to an undertaking; (2) Aid is granted by the State or from the State resources; (3) Aid favors certain undertakings or the production of certain goods; (4) Aid distorts competition or threatens to distorts it; (5) Aid distorts trade among member states; (6)Aid is not covered by any of the Treaty exemptions. An example of aid covered by the Treaty exemption and, as such, compatible with the EU market, is aid to promote economic development of areas where the standard of living is abnormally low or where there is serious underemployment. State aid consists in granting direct financial or in-kind advantages to the beneficiary, e.g. subsidies, grants for equipment, etc. State aid may also consist in the reduction of public and legal liabilities of the beneficiary, e.g., liabilities write-offs.
Published in Chapter:
SME's Innovation and Internationalization in Knowledge-Based Economy: EU Case
Copyright: © 2016
|Pages: 34
DOI: 10.4018/978-1-4666-8798-1.ch019
Abstract
The main goal of the chapter is to make an assessment of the innovative position, the level of internationalization and potential of small and medium-sized enterprises in the EU in the light of challenges implied by the building of knowledge-based economy. The chapter comprises several parts. Main attention is paid to the substance and factors that shape the knowledge-based economy, determinants of innovation in SMEs and the assessment of SMEs' innovation and internationalization in the EU. We also analyzed dependence between the development level of the EU Member States and R&D expenditure and the level of innovation and competitiveness of individual countries. To this end we used Spearman's rank correlation coefficient. Final part of the chapter is devoted to the EU support scheme for small and medium-sized enterprises, in particular it focuses on instruments connected with innovation and internationalization.