Size matters? Impact evaluation of business development grants on SME performance

Stjepan Srhoj, Michael Lapinski () and Janette Walde

Working Papers from Faculty of Economics and Statistics, Universität Innsbruck

Abstract: Many international organisations emphasize the need of public grant schemes evaluations. An evaluation provides the opportunity to assess the socio-economic impact achieved by the grant and allows for a refinement of such policy instruments in order to make public funding more effective in achieving the objectives. In this paper, we investigate the effects of a business development grant scheme. More specifically we question whether firms' performance measures increased after participating in this grant scheme. Methodically, we match grant receiving firms with grant non-receivers and estimate the average treatment effect on the treated using a two way fixed effects regression. Our results point towards a positive effect of the grant scheme, which is particularly evident for firms of smaller size. Our estimated dose-response functions show that the share of grant amount in firm profits needs to be high enough for the grants to be effective. According to back-of-the envelope analysis, benefits outweigh the direct scheme costs.

Keywords: business development grants; policy evaluation; two-way fixed effects regression; matching; heterogeneous treatment effects; dose-response-function (search for similar items in EconPapers)
JEL-codes: C21 G01 H23 H50 O38 (search for similar items in EconPapers)
Pages: 50 pages
Date: 2019
New Economics Papers: this item is included in nep-eur
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:inn:wpaper:2019-14

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