Evaluating the impact of firm subsidy using a multilevel propensity score approach
AbstractIn this paper, we investigate if firms who received the Regional Development Grant are performing better than firms that did not receive the subsidy. Using data on Swedish stock companies, we firstly estimate a multilevel logit model of the probability of receiving the subsidy. The multilevel approach enables us to adequately take into account the regional context. Secondly, we use propensity score matching to assess the successfulness of the subsidy. The results show that firm characteristics and regional context matters for the probability of receiving the subsidy. Subsidized firms increased their firm size compared to non-subsidized firms’, however; we find no evidence that the subsidized firms have any higher profitability.
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Bibliographic InfoPaper provided by Centre for Labour Market Policy Research (CAFO), School of Business and Economics, Linnaeus University in its series CAFO Working Papers with number 2009:3.
Length: 25 pages
Date of creation: 20 Jul 2008
Date of revision:
Note: Corresponding Author: Associate Professor Jonas Månsson, firstname.lastname@example.org
Contact details of provider:
Postal: Centre for Labour Market Policy Research (CAFO), School of Business and Economics, Linnaeus University, SE 351 95 Växjö, Sweden
Phone: +46 470 70 87 64
Web page: http://lnu.se/research-groups/cafo?l=en
More information through EDIRC
Subsidy; Policy evaluation; Firm profitability; Employment growth; Regional development; Multilevel; Propensity score matching;
Find related papers by JEL classification:
- C01 - Mathematical and Quantitative Methods - - General - - - Econometrics
- E20 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
- H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
- O18 - Economic Development, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
- R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-03-07 (All new papers)
- NEP-DCM-2009-03-07 (Discrete Choice Models)
- NEP-LAB-2009-03-07 (Labour Economics)
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- Óscar Afonso & Armando Silva, 2011.
"Non-scale endogenous growth effects of subsidies for exporters,"
FEP Working Papers
429, Universidade do Porto, Faculdade de Economia do Porto.
- Afonso, Oscar & Silva, Armando, 2012. "Non-scale endogenous growth effects of subsidies for exporters," Economic Modelling, Elsevier, vol. 29(4), pages 1248-1257.
- Bernini, Cristina & Pellegrini, Guido, 2011. "How are growth and productivity in private firms affected by public subsidy? Evidence from a regional policy," Regional Science and Urban Economics, Elsevier, vol. 41(3), pages 253-265, May.
- Michalek, Jerzy & Ciaian, Pavel & Kancs, d'Artis, 2013.
"Firm-Level Evidence Of Deadweight Loss Of Investment Support Policies: A Case Study Of Dairy Farms In Schleswig-Holstein,"
Proceedings Issues, 2013: Productivity and Its Impacts on Global Trade, June 2-4, 2013. Seville, Spain
152257, International Agricultural Trade Research Consortium.
- Michalek, Jerzy & Ciaian, Pavel & Kancs, d'Artis, 2013. "Firm-Level Evidence of Deadweight Loss of Investment Support Policies: A Case Study of Dairy Farms in Schleswig-Holstein," Proceedings Issues, 2013: Productivity and Its Impacts on Global Trade, June 2-4, 2013. Seville, Spain 152258, International Agricultural Trade Research Consortium.
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