Individual firms obtain subsidies in a wide variety of ways, some more complex and less transparent than others. These include subsidy instruments covered by the OECD MAGIC database, such as government grants, corporate tax concessions (especially common in high-tech sectors), and debt and equity financing provided on below-market terms, as well as other forms of support such as subsidised energy inputs (especially common in heavy industries).
Industrial subsidies
While subsidies can be helpful policy tools to address emergencies or market failures, they can also distort trade and competition depending on their design and target. The OECD is at the forefront of global efforts to identify, quantify, and analyse industrial subsidies and their impacts on markets.
Key messages
State enterprises are not only relatively large recipients of government support, but they can also provide support. This is, for example, the case where state banks offer industrial companies loans at below-market terms and conditions, or where state utilities provide companies with energy inputs at below-market prices. This can in turn tilt the playing field downstream in favour of those companies that are able to benefit from the lower prices charged by certain state enterprises.
OECD research using the OECD MAGIC database shows that subsidies can increase firms’ market share but do not necessarily improve their productivity or profitability. Around 22% of the global market share gains of firms that grew between 2005 and 2023 can, for example. be explained by the subsidies they received.
Government disclosure of subsidies is often partial and limited, if existent at all. This lack of transparency hinders global efforts to better discipline the most trade-distorting forms of support. The OECD MAGIC database therefore takes a unique firm-level approach, allowing it to measure subsidies provided globally and to identify subsidies given at the subnational (city, county, state) level. The resulting database offers a unique perspective on the scope and scale of industrial subsidies from the ground up.
Context
Industrial subsidies have reached their highest levels since the global financial crisis
Subsidies across 15 key industrial sectors have reached the highest level since the global financial crisis of 2008-2009. As a percentage of firms’ sales revenue, industrial subsidies amounted to 1.3% in 2024, which was the second highest level on record after the previous peak. The 2009 peak, however, coincided with a severe global recession, when a 15% year‑over‑year collapse in sales mechanically inflated the subsidy‑to‑revenue ratio. This was not the case in 2023-24, which indicates the recent increase in industrial subsidies is more structural.
Renewable energy, semiconductors and heavy industries receive more subsidies than other sectors
Between 2005 and 2024, firms producing solar photovoltaic panels, semiconductors, aluminium, steel, and shipbuilding were – as a percentage of firms’ sales revenue – the top five recipients of subsidies across the 15 sectors covered in the OECD MAGIC database.
