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.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
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
Date of revision:
Contact details of provider:
Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org
Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
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, Royal Economic Society 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
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Audretsch, David B & Mahmood, Talat, 1995. "New Firm Survival: New Results Using a Hazard Function," The Review of Economics and Statistics, MIT Press, vol. 77(1), pages 97-103, February.
- R. Glenn Hubbard, 1997.
"Capital-Market Imperfections and Investment,"
NBER Working Papers
5996, National Bureau of Economic Research, Inc.
- Richard Disney & Jonathan Haskel & Ylva Heden, 2003. "Entry, Exit and Establishment Survival in UK Manufacturing," Journal of Industrial Economics, Wiley Blackwell, vol. 51(1), pages 91-112, 03.
- Dehejia, R.H. & Wahba, S., 1998.
"Propensity Score Matching Methods for Non-Experimental Causal Studies,"
Discussion Papers, Columbia University, Department of Economics
1998_02, Columbia University, Department of Economics.
- Rajeev H. Dehejia & Sadek Wahba, 2002. "Propensity Score-Matching Methods For Nonexperimental Causal Studies," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 151-161, February.
- Rajeev H. Dehejia & Sadek Wahba, 1998. "Propensity Score Matching Methods for Non-experimental Causal Studies," NBER Working Papers 6829, National Bureau of Economic Research, Inc.
- Rajeev H. Dehejia & Sadek Wahba, 2002. "Propensity score matching methods for non-experimental causal studies," Discussion Papers, Columbia University, Department of Economics 0102-14, Columbia University, Department of Economics.
- Heckman, James J & Ichimura, Hidehiko & Todd, Petra E, 1997. "Matching as an Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Programme," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 64(4), pages 605-54, October.
- Richard Blundell & Monica Costa Dias, 2000. "Evaluation methods for non-experimental data," Fiscal Studies, Institute for Fiscal Studies, vol. 21(4), pages 427-468, January.
- Charles Brown & James L. Medoff, 1987.
"The Impact of Firm Acquisitions on Labor,"
NBER Working Papers
2273, National Bureau of Economic Research, Inc.
- Geroski, P. A., 1995. "What do we know about entry?," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 421-440, December.
- Görg, Holger & Strobl, Eric, 2002.
CEPR Discussion Papers
3402, C.E.P.R. Discussion Papers.
- Gâ€“rg, Holger & Eric Strobl, 2002. ""Footloose" Multinationals?," Royal Economic Society Annual Conference 2002, Royal Economic Society 89, Royal Economic Society.
- Barry, Frank & Bradley, John, 1997.
"FDI and Trade: The Irish Host-Country Experience,"
Economic Journal, Royal Economic Society,
Royal Economic Society, vol. 107(445), pages 1798-1811, November.
- Barry, F & Bradley, J, 1997. ""FDI and Trade : The Irish Host-Country Experience"," Papers 97/13, College Dublin, Department of Political Economy-.
- Meyer, Bruce D, 1995.
"Natural and Quasi-experiments in Economics,"
Journal of Business & Economic Statistics, American Statistical Association,
American Statistical Association, vol. 13(2), pages 151-61, April.
- Ron Jarmin, 1999. "Government Technical Assistance Programs* And Plant Survival: The Role Of Plant Ownership Type," Working Papers 99-2, Center for Economic Studies, U.S. Census Bureau.
- Agarwal, Rajshree & Audretsch, David B, 2001. "Does Entry Size Matter? The Impact of the Life Cycle and Technology on Firm Survival," Journal of Industrial Economics, Wiley Blackwell, vol. 49(1), pages 21-43, March.
- Matthias Almus & Susanne Prantl, 2002. "Die Auswirkungen Ã¶ffentlicher GrÃ¼ndungsfÃ¶rderung auf das Ãœberleben und Wachstum junger Unternehmen," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 222(2), pages 161-185.
- Audretsch, David B, 1991. "New-Firm Survival and the Technological Regime," The Review of Economics and Statistics, MIT Press, vol. 73(3), pages 441-50, August.
- Gorg, Holger & Strobl, Eric, 2002.
"Multinational companies and indigenous development: An empirical analysis,"
European Economic Review,
Elsevier, vol. 46(7), pages 1305-1322, July.
- Görg, Holger & Strobl, Eric, 2002. "Multinational Companies and Indigenous Development: An Empirical Analysis," CEPR Discussion Papers 3325, C.E.P.R. Discussion Papers.
- Juana Rivera-Lirio & María Muñoz-Torres, 2010. "The Effectiveness of the Public Support Policies for the European Industry Financing as a Contribution to Sustainable Development," Journal of Business Ethics, Springer, vol. 94(4), pages 489-515, July.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak).
If references are entirely missing, you can add them using this form.