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, while there are no statistically significant effects for foreign-owned plants based in Ireland.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1606.
Length: 32 pages
Date of creation: May 2005
Date of revision:
Publication status: published in: Southern Economic Journal, 2006, 72(4), 860-876
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Other versions of this item:
- Holger Görg & Eric Strobl, 2006. "Do Government Subsidies Stimulate Training Expenditure? Microeconometric Evidence from Plant-Level Data," Southern Economic Journal, Southern Economic Association, vol. 72(4), pages 860â876, April.
- 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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-05-29 (All new papers)
- NEP-EEC-2005-05-29 (European Economics)
- NEP-PBE-2005-05-29 (Public Economics)
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