Do Government Subsidies Stimulate Training Expenditure? Microeconometric Evidence from Plant-Level Data
AbstractThis paper examines whether financial assistance provided by government induces firms to spend more of their own funds on training expenditures, using plant-level data for the Republic of Ireland. We pay particular attention to the potential problems in such an evaluation study, namely selectivity and endogeneity, by first identifying a valid counterfactual for grant receiving plants via a matching estimator and then employing a difference-in-differences technique on this matched sample. Our results show that there are differences in causal effects between domestic and foreign-owned plants. For the former, we find clear evidence that grant receipt stimulates private expenditure, whereas there are no statistically significant effects for foreign-owned plants based in Ireland.
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Bibliographic InfoArticle provided by Southern Economic Association in its journal Southern Economic Journal.
Volume (Year): 72 (2006)
Issue (Month): 4 (April)
Other versions of this item:
- Görg, Holger & Strobl, Eric, 2005. "Do Government Subsidies Stimulate Training Expenditure? Microeconometric Evidence from Plant Level Data," IZA Discussion Papers 1606, Institute for the Study of Labor (IZA).
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
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