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Impact of Government Intervention on Employment Change and Plant Closure in Northern Ireland, 1983-97

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  • Richard Harris
  • Mary Trainor

Abstract

Harris R. and Trainor M. (2007) Impact of government intervention on employment change and plant closure in Northern Ireland, 1983-97, Regional Studies 41, 51-63. Financial assistance to manufacturing industry is an important element of the industrial development policy in Northern Ireland. This paper uses the individual plant-level records of the Annual Respondents Database (ARD) for the Northern Ireland manufacturing sector (1983-97) matched to the plant-level details of financial support provided by the Industrial Development Board to examine the effect of selective financial assistance (SFA) on employment change and plant closure. It is found that SFA concentrated on protecting existing, rather than new, enterprises in terms of employment change. Using a hazard model, it is found that the receipt of SFA significantly reduced the probability of plant closure by, on average, between 15 and 24%. Harris R. et Trainor M. (2007) L'impact de l'intervention gouvernementale sur l'evolution de l'emploi et la fermeture des unites de production en Irlande du Nord, de 1983 a 1997, Regional Studies 41, 51-63. L'aide financiere a finalite industrielle constitue un element cle de la politique en faveur du developpement industriel en Irlande du Nord. Cet article se sert des dossiers individuels de l'ARD aupres de l'industrie en Irlande du nord au niveau de l'unite de production (de 1983 a 1997), rapportes aux donnees au niveau de l'etablissement relatives a l'aide financiere affectee par la Industrial Development Board (commission chargee du developpement industriel) pour examiner l'impact de l'aide financiere a finalite regionale (Selective Financial Assistance, SFA) sur l'evolution de l'emploi et la fermeture des unites de production. Pour ce qui est de l'evolution de l'emploi, il s'avere que la SFA porte plutot sur la protection des entreprises existantes que sur les nouvelles entreprises. A partir d'un modele de risque, il s'avere que l'affectation de l'aide SFA reduit de 15% a 24% la probabilite de la fermeture des unites de production. Politique regionale en Irlande du Nord Aide financiere a finalite regionale Evolution de l'emploi Fermeture des unites de production Harris R. und Trainor M. (2007) Auswirkungen staatlicher Interventionen auf Beschaftigungslage und Betriebsschliessungen in Nordirland, 1983-97, Regional Studies 41, 51-63. Finanzhilfen fur die verarbeitende Industrie sind ein wichtiges Element der industriellen Entwicklungspolitik in Nordirland. In diesem Beitrag werden die Daten auf Betriebsebene der Annual Respondents Database (ARD) fur den Sektor der verarbeitenden Industrie in Nordirland (1983-97) mit den Daten auf Betriebsebene uber die Finanzhilfen durch den Rat fur Industrieentwicklung (Industrial Development Board) verglichen, um die Auswirkung selektiver Finanzhilfen auf Beschaftigungszahlen und Betriebsschliessungen zu untersuchen. Wir fanden heraus, dass sich die selektiven Finanzhilfen hinsichtlich einer Veranderung des Beschaftigungsniveaus auf den Schutz vorhandener - statt neuer - Betriebe konzentrieren. Mit Hilfe eines Gefahrenmodells ermittelten wir, dass sich die Wahrscheinlichkeit einer Betriebsschliessung durch den Erhalt dieser Finanzhilfen signifikant verringert: durchschnittlich um 15-24 Prozent. Regionalpolitik in Nordirland Selektive Finanzhilfe Anderung der Beschaftigungslage Betriebsschliessung Harris R. y Trainor M. (2007) Impacto de la intervencion gubernamental en el cambio en el empleo y cierre de plantas en Irlanda del Norte, 1983-97, Regional Studies 41, 51-63. La ayuda financiera a la industria manufacturera es un elemento importante de la politica de desarrollo industrial en Irlanda del Norte. En este ensayo comparamos los registros de las plantas individuales de la ARD (Annual Respondents Database) para el sector manufacturero de Irlanda del Norte (1983-97) con los detalles sobre las plantas en cuanto a la ayuda financiera ofrecida por la Oficina de Desarrollo Industrial para examinar el efecto de la ayuda financiera selectiva sobre el cambio de empleo y el cierre de plantas. Senalamos que, en lo que afecta al cambio de empleo, la ayuda financiera selectiva no se ocupa de la proteccion de empresas nuevas sino principalmente de las ya existentes. Con ayuda de un modelo de riesgos, observamos que al recibir ayuda financiera selectiva disminuyo en gran medida la probabilidad del cierre de plantas en una media entre un 15 y un 24 por ciento. Politica regional de Irlanda del Norte Cambio de empleo segun la ayuda financiera selectiva Cierre de plantas

Suggested Citation

  • Richard Harris & Mary Trainor, 2007. "Impact of Government Intervention on Employment Change and Plant Closure in Northern Ireland, 1983-97," Regional Studies, Taylor & Francis Journals, vol. 41(1), pages 51-63.
    • Handle: RePEc:taf:regstd:v:41:y:2007:i:1:p:51-63
    DOI: 10.1080/00343400601095225
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    References listed on IDEAS

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    1. Girma, Sourafel & Görg, Holger & Strobl, Eric, 2003. "Government Grants, Plant Survival and Employment Growth: A Micro-Econometric Analysis," IZA Discussion Papers 838, Institute of Labor Economics (IZA).
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    Cited by:

    1. Ankarhem, Mattias & Daunfeldt, Sven-Olov & Quoreshi, Shahiduzzaman & Rudholm, Niklas, 2009. "Do Regional Investment Grants Improve Firm Performance? Evidence from Sweden," Ratio Working Papers 137, The Ratio Institute.
    2. Augusto Cerqua & Guido Pellegrini, 2013. "Beyond the SUTVA: how industrial policy evaluations change when we allow for interaction among firms," ERSA conference papers ersa13p340, European Regional Science Association.
    3. John Moffat, 2015. "Regional Selective Assistance (RSA) in Scotland: Does It Make a Difference to Plant Survival?," Regional Studies, Taylor & Francis Journals, vol. 49(4), pages 568-581, April.
    4. European Commission, Directorate-General for Competition (Brussels) (ed.), 2016. "Ex-post evaluation of the impact of restructuring aid decisions on the viability of aided (non-financial) firms: Final report," ZEW Expertises, ZEW - Leibniz Centre for European Economic Research, number 130514.
    5. Augusto Cerqua & Guido Pellegrini, 2014. "Beyond the SUTVA: how policy evaluations change when we allow for interactions among firms," Working Papers 2/14, Sapienza University of Rome, DISS.

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