Meaning of cross-subsidy | Babel Free

Definitions

A subsidy from profit-making operations of a business to support loss-making operations of the same business.

Examples

“The grouping into the Big Four (the Great Western Railway, the London Midland & Scottish Railway, the London & North Eastern Railway, and Southern Railway) came into effect in 1923, and created the largest businesses in Britain. It effectively formalised the concept of cross-subsidy, whereby each of the four would subsidise loss-making routes from those that were profitable, without financial support from the government.”

CEFR level