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Employment effects of investment grants and firm heterogeneity

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  • Eva Dettmann
  • Antje Weyh
  • Mirko Titze

Abstract

This study estimates the firm-level employment effects of investment grants in Germany. In addition to the average treatment effect on the treated, we examine discrimination in the funding rules as a potential source of effect heterogeneity. We combine a staggered difference-in-differences approach with a matching procedure at the cohort level. The findings reveal a positive effect of investment grants on employment development. The subsample analyses yield strong evidence for heterogeneous effects based on firm characteristics and the economic environment. They highlight the responsibility of the local funding authorities to clarify ex ante which goals of a funding programme are most important in their regions.

Suggested Citation

  • Eva Dettmann & Antje Weyh & Mirko Titze, 2025. "Employment effects of investment grants and firm heterogeneity," Regional Studies, Taylor & Francis Journals, vol. 59(1), pages 2549799-254, December.
    • Handle: RePEc:taf:regstd:v:59:y:2025:i:1:p:2549799
    DOI: 10.1080/00343404.2025.2549799
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