We investigate the determinants of state aid to the car sector in the European Union over the period 1992-2007. We find that industry’s characteristics such as the presence of a "national champion" matter. Additionally, the EU address for "less aid, better aid" seems to be supported, at least for the industry. We complement the analysis by estimating the determinants of sectoral and ad hoc aid, confirming previous
results in the literature.

Authors: Marcella Nicolini (FEEM), Carlo Scarpa (Università di Brescia), Paola Valbonesi (Università di Padova).