State industrial policy: subsidies and tax incentives for automation and their impact on the technological renewal of production assets and economic growth

Abstract

The article is devoted to a quantitative assessment of the impact of state industrial policy instruments—direct subsidies and tax incentives for automation—on the technological renewal of production assets and the parameters of economic growth. It examines how various forms of fiscal support are transformed into the dynamics of capital expenditures (CAPEX), the structure of fixed assets, and labor productivity under conditions of limited budgetary resources and a significant investment overhang. The empirical base consists of panel data for 2014–2023 on 250 of the largest industrial enterprises in key sectors (mechanical engineering, metallurgy, chemistry, woodworking), combining statistics from national and financial registers, information from the central bank, regulatory legal acts, and materials from in-depth interviews with company management. The methodology relies on panel regression models with fixed effects, the Difference-in-Differences approach for analyzing the impact of special investment regimes, clustering of corporate behavioral strategies, as well as a comparative analysis of groups of beneficiaries of direct subsidies, tax incentives, and combined support. It is shown that the investment tax deduction and accelerated depreciation have a pronounced multiplicative effect: each notional ruble of tax benefit mobilizes more than one ruble of private investment, doubling the share of automated equipment in the CAPEX structure and ensuring ROIC growth for new projects. At the same time, there is significant industry-regional heterogeneity of effects: in capital-intensive sectors, interest rate subsidies outperform direct grants in efficiency, whereas in industries with short investment cycles, grant support demonstrates faster output growth and a shorter payback period. It is established that automation radically changes the cost structure, reducing the share of labor, energy, and material costs while significantly increasing depreciation, which heightens enterprises’ sensitivity to capacity underutilization risks and necessitates countercyclical support measures. The conclusion is made about the need to move from evaluating state support by the volume of funds utilized to metrics of added value, productivity, and technological sovereignty, as well as towards more flexible, segmented combinations of tax and subsidy instruments linked to the requirements for integration of domestic technologies and personnel retraining programs.