Abstract:
Industrial subsidy is an important tool that encourages national
production and plays a crucial role in the realization of a resilient
-economy. Due to limited financial resources, it is important to
determine how these subsidies can be distributed efficiently.
Accordingly, the purpose of this study is to provide a model for
allocating industrial subsidy among 22 manufacturing industries
at the level of 2-digit ISIC codes using the Zero Sum Gain -Data
Envelopment Analysis (ZSG-DEA) model based on merging of
the concepts of game theory with the DEA. The model also
utilizes four effective criteria in allocating public resources,
namely industrial added value, the number of industrial
employees, the amount of direct export, and the amount of
industrial taxes and duties. The results of the study show that the
food and beverage industry should receive the highest proportion
of optimum subsidy, whereas industries related to manufacturing
office machines, accounting and computing machinery, radio,
television, communication devices, wearing apparel, tanning and
polishing, leather and leather goods, fur, and tobacco products
should receive the lowest proportion of industrial subsidies.
Machine summary:
ir Subsidy Allocation using ZSG-DEA Model: Evidence from Manufacturing Industries in Iran Mohammad Ali Feizpoura, Mansoor Mahinizadeha, Kazem Yavarib, Iman Shaker Ardakanya a.
Accordingly, the purpose of this study is to provide a model for allocating industrial subsidy among 22 manufacturing industries at the level of 2-digit ISIC codes using the Zero Sum Gain -Data Envelopment Analysis (ZSG-DEA) model based on merging of the concepts of game theory with the DEA.
They concluded that industrial subsidy is related positively to R&D expenditure and productivity of Korean SMEs. The evaluation of the methods and models engaged by previous studies indicates that the focus of these researches has been on the effects of industrial subsidies.
In this study, the output oriented ZSG-DEA with constant returns to scale is used for efficient allocation of industrial subsidy between 22 industries of Iran.
4. Empirical Results After the selection of input and output of the presented model, the optimum share of 22 manufacturing industries was calculated using the ZSG-DEA allocation model.
The increase of export as well as national production is another result of subsidy allocation as emergent from the model presented in this study (ZSG-DEA).
To do this, the ZSG-DEA model is used to determine the efficient shares of selected industries from subsidy resources.
According to the results of this study, the allocation of subsidy as per the ZSG- DEA model helps in efficient distribution amongst all the intended industries in comparison to equal distribution of subsidies.