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The effect of grant receipt on start-up size: Evidence from plant level data

  • Sourafel Girma
  • Holger Görg
  • Aoife Hanley
  • Eric Strobl

    ()

In this paper we use plant level data on the start-up size of new plant entries and detailed information on the grants received by such plants in order to investigate whether grant receipt encourages plants to start-up with more employment than without support. The data relate to manufacturing plants in the Republic of Ireland, where industrial policy has a long history of using discretionary grants to encourage employment growth. We use a matching procedure to deal with the issue of selectivity into grant receipt, and a quantile regression estimator to allow for different effects of grants on plants depending on their position in the start-up size distribution. Our results provide evidence that grants do indeed encourage plants to start-up larger. We also find that this effect is generally higher for foreign than for domestic plants, and that it differs for plants at different quantiles of the start-up size distribution

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File URL: http://hdl.handle.net/10.1007/s10843-010-0061-y
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Article provided by Springer in its journal Journal of International Entrepreneurship.

Volume (Year): 8 (2010)
Issue (Month): 4 (December)
Pages: 371-391

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Handle: RePEc:kap:jinten:v:8:y:2010:i:4:p:371-391
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