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Dopad investičních pobídek na objem investic v České republice
[The Effect of Investment Incentives on Investment in Czech Republic]

Listed author(s):
  • Peter Bolcha
  • Alena Zemplinerová
Registered author(s):

    The policy of investment incentives is applied in majority of countries all over the world. This popularity is in contradiction with rare academic analyses. This paper sheds some light on causal impact of such policy on investment of supported firms in Czech Republic. We use individual level panel data containing crucial observables about the firm behaviour. We overcome the selection problem by application of propensity score matching. Our comparison of investment behaviour of supported firms and firms from control group shows that the extra investment generated (or maybe only accelerated) was at most 26% of contracted amounts. Even with constraints and assumptions we explicitly discuss in our work, this indicates that the arguments for the provision of this policy in Czech economy are not valid. These findings are in line with mixed (but mostly similar) empirical evidence from other countries.

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    Article provided by University of Economics, Prague in its journal Politická ekonomie.

    Volume (Year): 2012 (2012)
    Issue (Month): 1 ()
    Pages: 81-100

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    Handle: RePEc:prg:jnlpol:v:2012:y:2012:i:1:id:833:p:81-100
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    1. James J. Heckman & Hidehiko Ichimura & Petra E. Todd, 1997. "Matching As An Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Programme," Review of Economic Studies, Oxford University Press, vol. 64(4), pages 605-654.
    2. Michael Lechner, 2000. "An Evaluation of Public-Sector-Sponsored Continuous Vocational Training Programs in East Germany," Journal of Human Resources, University of Wisconsin Press, vol. 35(2), pages 347-375.
    3. Miroslav Plojhar & Martin Srholec, 2004. "Politická ekonomie investičních pobídek
      [Political economics of investment incentives]
      ," Politická ekonomie, University of Economics, Prague, vol. 2004(4), pages 451-466.
    4. Marco Caliendo & Sabine Kopeinig, 2008. "Some Practical Guidance For The Implementation Of Propensity Score Matching," Journal of Economic Surveys, Wiley Blackwell, vol. 22(1), pages 31-72, February.
    5. Cannari Luigi & D'Aurizio Leandro & de Blasio Guido, 2007. "The Effectiveness of Investment Subsidies: Evidence from Survey Data," Rivista italiana degli economisti, Società editrice il Mulino, issue 3, pages 329-346.
    6. Bronzini, Raffaello & de Blasio, Guido, 2006. "Evaluating the impact of investment incentives: The case of Italy's Law 488/1992," Journal of Urban Economics, Elsevier, vol. 60(2), pages 327-349, September.
    7. Olley, G Steven & Pakes, Ariel, 1996. "The Dynamics of Productivity in the Telecommunications Equipment Industry," Econometrica, Econometric Society, vol. 64(6), pages 1263-1297, November.
    8. Joshua D. Angrist, 1998. "Estimating the Labor Market Impact of Voluntary Military Service Using Social Security Data on Military Applicants," Econometrica, Econometric Society, vol. 66(2), pages 249-288, March.
    9. Faini, Riccardo & Schiantarelli, Fabio, 1987. "Incentives and Investment Decisions: The Effectiveness of Regional Policy," Oxford Economic Papers, Oxford University Press, vol. 39(3), pages 516-533, September.
    10. Sascha O. Becker & Andrea Ichino, 2002. "Estimation of average treatment effects based on propensity scores," Stata Journal, StataCorp LP, vol. 2(4), pages 358-377, November.
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