nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2009‒03‒07
one paper chosen by
Philip Yu
Hong Kong University

  1. Evaluating the impact of firm subsidy using a multilevel propensity score approach By Gadd, Håkan; Hansson, Gustav; Månsson, Jonas

  1. By: Gadd, Håkan (Swedish Institute for Growth Policy Studies (ITPS)); Hansson, Gustav (Swedish Insitute for Growth Policy Studies (ITPS)); Månsson, Jonas (Centre for Labour Market Policy Research (CAFO))
    Abstract: In this paper, we investigate if firms who received the Regional Development Grant are performing better than firms that did not receive the subsidy. Using data on Swedish stock companies, we firstly estimate a multilevel logit model of the probability of receiving the subsidy. The multilevel approach enables us to adequately take into account the regional context. Secondly, we use propensity score matching to assess the successfulness of the subsidy. The results show that firm characteristics and regional context matters for the probability of receiving the subsidy. Subsidized firms increased their firm size compared to non-subsidized firms’, however; we find no evidence that the subsidized firms have any higher profitability.
    Keywords: Subsidy; Policy evaluation; Firm profitability; Employment growth; Regional development; Multilevel; Propensity score matching
    JEL: C01 E20 H32 O18 R11
    Date: 2008–07–20

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