Government Grants, Plant Survival and Employment Growth: A Micro-Econometric Analysis
AbstractIn this paper we analyse the impact of governmental grant provision on plant performance. To this end we utilise rich information derived from three data sources for the manufacturing sector in Ireland, where grant provision has been an important part of the industrial policy. We use a matching technique combined with a difference-in-differences estimator in the empirical analysis. Our results indicate that particularly capital related, but also other types of grants can provide an important impetus to plant survival and employment growth. We also discover some differences in terms of the effectiveness of grants between foreign multinationals and domestic plants. Specifically, while grants have helped to stimulate employment creation in multinationals, they may not always be an effective way of ensuring that these remain in the host country. In contrast, grants have in general been successful in not only helping domestic plants to survive longer, but also to create more jobs.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 838.
Length: 34 pages
Date of creation: Jul 2003
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Other versions of this item:
- Eric Strobl & Sourafel Girma & Holger Gorg, 2004. "Government Grants, Plant Survival And Employment Growth: A Micro-Econometric Analysis," Royal Economic Society Annual Conference 2004 99, Royal Economic Society.
- J2 - Labor and Demographic Economics - - Demand and Supply of Labor
- L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
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