State aid and industrial characteristics

This paper sheds some empirical light on the relationship between disbursements of aid to British industry and the characteristics of the receiving industries. The technique of canonical correlation is used to test the hypothesis that the provision of government aid to British industry forms a coherent set of industrial policies. The results for 1975/6 support the hypothesis suggesting that aid disbursements bear a systematic relation to those industrial characteristics which reflect the general objectives of government policymakers. However, the pattern of assistance is complex with each of the three identifiable components of aid; building and works, plant and machinery, and research and development, having a significant and separate set of relations with the industrial characteristics.