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An Evaluation of a Regional Development Agency's Grants in Terms of Deadweight and Displacement

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  • H Lenihan

    (Department of Economics, College of Business, University of Limerick, Ireland)

Abstract

For a number of decades considerable resources have been devoted to supporting Irish industrial policies. There has, however, been a distinct lack of evaluation of these policies. This is particularly pertinent to the Irish small and medium-sized enterprise (SME) sector given its employment potential and importance to the domestic economy. The Small Business Task Force reports that 98% of businesses in Ireland employ fewer than 50 persons and that these provide around half of the total employment in the private sector. There has, however, been a distinct lack of research into the additional impact of SME policy, and particularly the measurement of the twin concepts of deadweight and displacement. To help bridge this gap in Irish SME policy research, the author evaluates grants awarded to indigenous firms (91% of which are SMEs) by a regional development agency in the Shannon region of Ireland. Two components of additionality—deadweight and displacement—are used to aid this evaluation process. The prime methodological approach is that of the self-assessment approach, involving in-depth face-to-face interviews with the managing directors of 77 firms that received grants from the regional development agency in 1995. Data emanating from interviews are then used to obtain estimates of deadweight and displacement in the Shannon region of Ireland.

Suggested Citation

  • H Lenihan, 1999. "An Evaluation of a Regional Development Agency's Grants in Terms of Deadweight and Displacement," Environment and Planning C, , vol. 17(3), pages 303-318, June.
  • Handle: RePEc:sae:envirc:v:17:y:1999:i:3:p:303-318
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    Cited by:

    1. Mark Hart & Helena Lenihan & Stephen Roper, 2003. "Evaluating the Net Additionality of Industrial Development Assistance in Ireland," ERSA conference papers ersa03p412, European Regional Science Association.
    2. Duch, Néstor & Montolio, Daniel & Mediavilla , Mauro, 2009. "Evaluating the impact of public subsidies on a firm’s performance: a two-stage quasi-experimental approach," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 16, pages 143-165.
    3. Girma, Sourafel & Görg, Holger & Strobl, Eric & Walsh, Frank, 2008. "Creating jobs through public subsidies: An empirical analysis," Labour Economics, Elsevier, vol. 15(6), pages 1179-1199, December.
    4. David Bailey & Helena Lenihan & Ajit Singh, 2009. "Lessons for African Economies from Irish and East Asian Industrial Policy," Journal of Industry, Competition and Trade, Springer, vol. 9(4), pages 357-382, December.
    5. Frantisek TURNOVEC, "undated". "Council, Commission and European Parliament Influence in European Union Decision Making," EcoMod2009 21500089, EcoMod.
    6. Anthony Murphy & Brendan M. Walsh & Frank Barry, 2003. "The economic appraisal system for projects seeking support from the industrial development agencies," Open Access publications 10197/1600, School of Economics, University College Dublin.
    7. Bailey, David & Lenihan, Helena & Singh, Ajit, 2008. "Tiger, tiger, burning bright? industrial policy lessons from Ireland and East Asia for small African economies," MPRA Paper 53356, University Library of Munich, Germany.

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