The effect of grant receipt on start-up size: Evidence from plant level data
Sourafel Girma (),
Aoife Hanley and
Eric Strobl ()
No 1607, Kiel Working Papers from Kiel Institute for the World Economy (IfW)
In this paper we use plant level data on the start-up size of new plant entries and detailed information on the grants received by such plants in order to investigate whether grant receipt encourages plants to start-up with more employment than without support. The data relate to manufacturing plants in the Republic of Ireland, where industrial policy has a long history of using discretionary grants to encourage employment growth. We use a matching procedure to deal with the issue of selectivity into grant receipt, and a quantile regression estimator to allow for different effects of grants on plants depending on their position in the start-up size distribution. Our results provide evidence that grants do indeed encourage plants to start-up larger. We also find that this effect is generally higher for foreign than for domestic plants, and that it differs for plants at different quantiles of the start-up size distribution.
Keywords: Grants; subsidies; entry; start-up size (search for similar items in EconPapers)
JEL-codes: H2 L2 (search for similar items in EconPapers)
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Journal Article: The effect of grant receipt on start-up size: Evidence from plant level data (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwkwp:1607
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