FIML estimation of a bivariate probit selection rule: an application on firm growth and subsidisation
AbstractThis study applies a full information maximum likelihood (FIML) estimator of the sample selection model with bivariate selection rule for the investigation of the impact of subsidised firm foundation from unemployment on employment growth of the firm. The empirical analysis is based on the ZEW Firm Start-up Panel using a cohort of firms founded in 15 labour market districts during 1993 and 1995. Estimation results show that the use of the FIML estimator is clearly warranted, compared to a two-step estimator. The FIML model yields a significant negative impact of bridging allowance on employment growth, whereas the two-step estimator underestimates the impact. --
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Bibliographic InfoPaper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 01-13.
Date of creation: 2001
Date of revision:
Find related papers by JEL classification:
- J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy
- D92 - Microeconomics - - Intertemporal Choice - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
- C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
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