Subsidies as a tool for empowering SMEs: from empirical effects to future opportunities in agri-food sector

Subsidies for small and medium-sized enterprises (SMEs) are the most im-portant agricultural policy instruments in developing countries. They can be used to finance various needs of enterprises in primary agricultural produc-tion, food industry or in rural tourism. The expected impact of the granted subsidies is aligned with the primary objective of the enterprise’s activities: to achieve growing profit as the most significant financial outcome. The analysis in this paper aims to estimate the impact of subsidies on selected business results of SMEs in Serbia from 2013 to 2018, as well as their align-ment with the basic postulates of business activity. The sample consists of 226 enterprises registered for activities belonging to the agri-food sector. The effects of subsidies were estimated using the econometric analysis of panel data, with net profit as the dependent variable and total assets and total lia-bilities as the independent variables.