IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

Firm-Level Evidence Of Deadweight Loss Of Investment Support Policies: A Case Study Of Dairy Farms In Schleswig-Holstein

  • Michalek, Jerzy
  • Ciaian, Pavel
  • Kancs, d'Artis

The main objective of the present study is to estimate the extent to which the RDP investment support has a complementary or a substitutionary effect on farm investments. In order to answer this question, we attempt to quantify the potential deadweight loss by estimating the extent to which the RDP beneficiaries would have undertaken comparable investments also without the investment support. We find that the deadweight loss of the RDP is close to 100%, implying that firm investment would have been undertaken also without the support. These results suggest that capital market distortions are not significant in Schleswig- Holstein. Similarly, no evidence was found that, due to programme support, farms would have brought forward their investments planned originally in a later period, suggesting no evidence of inter-temporal substitution of investments. These results are new, as the deadweight loss and its conditionality have not been studied in the context of the RDP in Germany before.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://purl.umn.edu/152257
Download Restriction: no

Paper provided by International Agricultural Trade Research Consortium in its series Proceedings Issues, 2013: Productivity and Its Impacts on Global Trade, June 2-4, 2013. Seville, Spain with number 152257.

as
in new window

Length:
Date of creation: Jun 2013
Date of revision:
Handle: RePEc:ags:iatr13:152257
Contact details of provider: Web page: http://iatrcweb.org/

More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. A. Smith, Jeffrey & E. Todd, Petra, 2005. "Does matching overcome LaLonde's critique of nonexperimental estimators?," Journal of Econometrics, Elsevier, vol. 125(1-2), pages 305-353.
  2. Pavel Ciaian & d'Artis Kancs & Jerzy Michalek, 2015. "Investment crowding-out: firm-level evidence from Germany," Working Papers LICOS Centre for Institutions and Economic Performance 516219, KU Leuven, Faculty of Economics and Business, LICOS Centre for Institutions and Economic Performance.
  3. Ortner, Karl M., 9. "Evaluation of investment support in rural development programmes: results for selected measures," Rural Areas and Development, European Rural Development Network, vol. 9.
  4. Sascha O. Becker & Marco Caliendo, 2007. "mhbounds - Sensitivity Analysis for Average Treatment Effects," Discussion Papers of DIW Berlin 659, DIW Berlin, German Institute for Economic Research.
  5. Medonos, Tomas & Ratinger, Tomas & Hruska, Martin & Spicka, Jindrich, 2012. "The Assessment of the Effects of Investment Support Measures of the Rural Development Programmes: the Case of the Czech Republic," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 4(4), December.
  6. David, Paul A. & Hall, Bronwyn H. & Toole, Andrew A., 1999. "Is Public R&D a Complement or Substitute for Private R&D? A Review of the Econometric Evidence," Department of Economics, Working Paper Series qt1sz6g8bv, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
  7. S. Blancard & J.Ph. Boussemart & W. Briec & K. Kerstens, 2006. "Short- and Long-Run Credit Constraints in French Agriculture: A Directional Distance Function Framework Using Expenditure-Constrained Profit Functions," Post-Print hal-00211159, HAL.
  8. Richard Harris & Mary Trainor, 2005. "Capital Subsidies and their Impact on Total Factor Productivity: Firm-Level Evidence from Northern Ireland," Journal of Regional Science, Wiley Blackwell, vol. 45(1), pages 49-74.
  9. Kirchweger, Stefan & Kantelhardt, Jochen, 2012. "Improving Farm Competitiveness through Farm-Investment Support: a Propensity Score Matching Approach," 131st Seminar, September 18-19, 2012, Prague, Czech Republic 135791, European Association of Agricultural Economists.
  10. Dan A. Black & Jeffrey Smith, 2003. "How Robust is the Evidence on the Effects of College Quality? Evidence From Matching," University of Western Ontario, Centre for Human Capital and Productivity (CHCP) Working Papers 20033, University of Western Ontario, Centre for Human Capital and Productivity (CHCP).
  11. Jerome Adda & Russell Cooper, 1997. "Balladurette and Juppette: A Discrete Analysis of Scrapping Subsidies," Papers 0076, Boston University - Industry Studies Programme.
  12. Luigi Cannari & Leandro D'Aurizio & Guido de Blasio, 2006. "The effectiveness of investment subsidies: evidence from survey data," Questioni di Economia e Finanza (Occasional Papers) 4, Bank of Italy, Economic Research and International Relations Area.
  13. Zhao, Zhong, 2005. "Sensitivity of Propensity Score Methods to the Specifications," IZA Discussion Papers 1873, Institute for the Study of Labor (IZA).
  14. Ratinger, Tomas & Medonos, Tomas & Spicka, Jindrich & Hruska, Martin & Vilhelm, Vaclav, 2012. "The assessment of the effects of investment support measures of the Rural Development Programmes: the case of the Czech Republic," 131st Seminar, September 18-19, 2012, Prague, Czech Republic 135775, European Association of Agricultural Economists.
  15. Salvioni, Cristina & Sciulli, Dario, 2011. "Farm level impact of rural development policy: a conditional difference in difference matching approach," 122nd Seminar, February 17-18, 2011, Ancona, Italy 99421, European Association of Agricultural Economists.
  16. Andries Brandsma & Pavel Ciaian & d'Artis Kancs, 2010. "The Role of Additionality in the EU Cohesion Policies: An Example of Firm-Level Investment Support," EERI Research Paper Series EERI_RP_2010_46, Economics and Econometrics Research Institute (EERI), Brussels.
  17. Rolf Färe & Shawna Grosskopf & Hyunok Lee, 1990. "A Nonparametric Approach to Expenditure-Constrained Profit Maximization," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(3), pages 574-581.
  18. Rosenthal, Stuart S. & Strange, William C., 2004. "Evidence on the nature and sources of agglomeration economies," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 49, pages 2119-2171 Elsevier.
  19. Auerbach, Alan J & Hines, James R, Jr, 1988. "Investment Tax Incentives and Frequent Tax Reforms," American Economic Review, American Economic Association, vol. 78(2), pages 211-16, May.
  20. Alasdair Rae, 2010. "Urban and Regional Policy and Its Effects (Volume 2)," European Planning Studies, Taylor & Francis Journals, vol. 18(4), pages 665-667, April.
  21. Gadd, Håkan & Hansson, Gustav & Månsson, Jonas, 2008. "Evaluating the impact of firm subsidy using a multilevel propensity score approach," CAFO Working Papers 2009:3, Centre for Labour Market Policy Research (CAFO), School of Business and Economics, Linnaeus University.
  22. Abel, Andrew B., 1982. "Dynamic effects of permanent and temporary tax policies in a q model of investment," Journal of Monetary Economics, Elsevier, vol. 9(3), pages 353-373.
  23. Jeffrey Smith, 2000. "A Critical Survey of Empirical Methods for Evaluating Active Labor Market Policies," UWO Department of Economics Working Papers 20006, University of Western Ontario, Department of Economics.
  24. 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.
  25. Pavel Ciaian & Jan Fałkowski & D’Artis Kancs, 2012. "Productivity and credit constraints: A firm-level propensity score evidence for agricultural farms in central and east European countries," Acta Oeconomica, Akadémiai Kiadó, Hungary, vol. 62(4), pages 459-487, December.
  26. Caliendo, Marco & Hujer, Reinhard, 2005. "The Microeconometric Estimation of Treatment Effects - An Overview," IZA Discussion Papers 1653, Institute for the Study of Labor (IZA).
  27. Gianfranco E. Atzeni & Oliviero A. Carboni, 2006. "The Effects of Subsidies on Investment: an Empirical Evaluation on ICT in Italy," Revue de l'OFCE, Presses de Sciences-Po, vol. 97(5), pages 279-302.
  28. Marco Caliendo & Sabine Kopeinig, 2005. "Some Practical Guidance for the Implementation of Propensity Score Matching," Discussion Papers of DIW Berlin 485, DIW Berlin, German Institute for Economic Research.
  29. Guildo W. Imbens, 2003. "Sensitivity to Exogeneity Assumptions in Program Evaluation," American Economic Review, American Economic Association, vol. 93(2), pages 126-132, May.
  30. Mika Haapanen & Anu Tokila & Jari Ritsilä, 2005. "When are investment subsidies crucial for investments?," ERSA conference papers ersa05p466, European Regional Science Association.
  31. 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.
  32. Todd M. Gabe & David S. Kraybill, 2002. "The Effect of State Economic Development Incentives on Employment Growth of Establishments," Journal of Regional Science, Wiley Blackwell, vol. 42(4), pages 703-730.
  33. Bernini, Cristina & Pellegrini, Guido, 2011. "How are growth and productivity in private firms affected by public subsidy? Evidence from a regional policy," Regional Science and Urban Economics, Elsevier, vol. 41(3), pages 253-265, May.
  34. Lee, Jong-Wha, 1996. "Government Interventions and Productivity Growth," Journal of Economic Growth, Springer, vol. 1(3), pages 391-414, September.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:ags:iatr13:152257. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.