Do Public Subsidies Have an Impact on New Firm Survival? An Empirical Study with French Data
AbstractThis paper deals with the impact of social contributions and tax cuts (which are considered as operating subsidies) on new firms' probability of survival and economic performance. We use a rich matched database of French firms that were newly created in 1998 and that include entrepreneurs' individual characteristics and firm economic and financial variables. We implement propensity score matching models and show that (i) subsidized firms are more likely to survive after the first two years; (ii) bank loans increase the probability of survival, be they subsidized or not; and (iii) operating subsidies allow firms to increase their turnover. However, no significant effects of these subsidies on other performance criteria are found.
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Bibliographic InfoPaper provided by TEPP Working Papers in its series Papers with number 2010-4.
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- Lionel Desiage & Richard Duhautois & Dominique Redor, 2010. "Do Public Subsidies Have an Impact on New Firm Survival? An Empirical Study with French Data," Working Papers halshs-00809709, HAL.
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
- H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
- L38 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Policy
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