In the broadest sense, a subsidy is a grant or other financial assistance given by one party for the support or development of another. However, in a business environment, the kind of subsidies most likely to raise legal and ethical issues are those given by a government or a philanthropic foundation to a person or association for the purpose of promoting an enterprise considered beneficial to a specific subsection of the public or to the public in general. A subsidy can be legal, illegal, ethical, or unethical, depending on its effects. All subsidies are forms of economic intervention, and therefore trade barriers are inherently contrary to the market’s demands. While some are designed to protect enterprises considered to be beneficial to society, they can also ...

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