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The role of business subsidies in job-creation start-ups, gazelles and imcumbents

  • Koski, Heli
  • Pajarinen, Mika

Our data concerning the whole Finnish company population from the years 2003-2008 suggest that the impacts of business subsidies on employment growth differ more between high-growth start-ups and other firms than between start-ups and over five years old incumbents. All subsidies seem to relate positively to the contemporary employment growth both among start-ups and incumbents. Furthermore, our data show that both the employment of start-ups and older incumbents receiving employment or other subsidies grow more than that of non-subsidized firms after subsidy reception. Instead, we find that business subsidies do not provide significant further boost for the contemporary or after-subsidy growth of gazelles. There are apparently some other factors dominating the growth of young high-growth firms making them to grow strongly, in many cases, with or without subsidies.

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Paper provided by The Research Institute of the Finnish Economy in its series Discussion Papers with number 1246.

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Length: 34 pages
Date of creation: 2011
Date of revision:
Handle: RePEc:rif:dpaper:1246
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