Figure 9: Probability of an SOE Receiving a Subsidy, and Value of Subsidies Received, Relative to POEs by Sector, 2011-2019 <!-- Start of picture text --> (a) Probability of an SOE Receiving a Subsidy (b) Log Value of Subsidy Received by SOEs<br>Relative to POEs Relative to POEs (among recipients)<br>**<br>0.24 ** 4.0 ** **<br>3.5<br>0.20<br>3.0<br>0.16 2.5 *** ***<br>*<br>0.12 2.0<br>0.080.04 *** *** 1.51.0 ** **<br>0.5<br>0.00 0.0<br>Competitive Partially Natural Competitive Partially Natural<br>Contestable Monopoly Contestable Monopoly<br>(c) Probability of an SOE Receiving a Subsidy (d) Log Value of Subsidy Received by SOEs<br>Relative to POEs (controlling for productivity Relative to POEs (among recipients and<br>level) controlling for productivity level)<br>** *** ***<br>0.24 ** 4.0<br>3.5<br>0.20 3.0 *** *** **<br>0.16 2.5 *<br>2.0 ***<br>0.12 1.5 ***<br>1.0<br>0.08 0.5<br>0.04 *** *** 0.0<br>-0.5<br>0.00 -1.0<br>Competitive Partially Natural Competitive Partially Natural<br>Contestable Monopoly Contestable Monopoly<br>Odds ratio<br>Logarithmic form<br>10-100% 10-24.9% 25-49.9% 50% or more 10-100% 10-24.9% 25-49.9% 50% or more 10-100% 10-24.9% 25-49.9% 50% or more 10-100% 10-24.9% 25-49.9% 50% or more 10-100% 10-24.9% 25-49.9% 50% or more 10-100% 10-24.9% 25-49.9% 50% or more<br>Odds ratio<br>Logarithmic form<br>10-100% 10-24.9% 25-49.9% 50% or more 10-100% 10-24.9% 25-49.9% 50% or more 10-100% 10-24.9% 25-49.9% 50% or more 10-100% 10-24.9% 25-49.9% 50% or more 10-100% 10-24.9% 25-49.9% 50% or more 10-100% 10-24.9% 25-49.9% 50% or more<br><!-- End of picture text --> Source: World Bank staff analysis using Romania MoF firm-level data, 2011-2019.

Note: The sample includes all firms. Estimates in graph (a) are odds ratios indicating for the probability of receiving a subsidy based on a logit model with a dummy variable taking the value one if the firm reported a positive subsidy amount. The estimates in (b) are in logarithmic terms with the dependent variable being the log of the subsidy amount the firm reported as received. SOE variables are dummy variables taking the value one if national or subnational governments have ownership stake of 10-100% in the firm. The reference group is private-owned enterprises (POEs), defined as firms where national or subnational governments own 0-9.9%. All models include 2-digit NACE industry and year-fixed effects. Standard errors clustered at the industry level are in parentheses. ***, **, and * indicate significance at 1 percent, 5 percent, and 10 percent. Where indicated, the model includes age groups: Young (3-5), Mature (6-10), and Old (>10), with Start-ups (0-2) being the reference category, and size group: Small (10-49), Medium (50-99), Large (100-499), and Very large (500+). with Micro (1-9) being the reference category.

**In addition, some SOEs in competitive and contestable sectors were more likely to receive government subsidies, but among recipients, SOEs in natural monopolies receive larger values of subsidies** . While SOE operating in competitive sectors were also more likely to receive government subsidies relative to POEs, they were targeted less compared to SOEs in partially contestable sectors. (Figure 9(a)). However, in terms of the value of subsidies, although several of the majority and minority owned SOEs in the three types of sectors received larger values relative to POEs, the largest amounts went

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