Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/207080
Authors: 
Srhoj, Stjepan
Lapinski, Michael
Walde, Janette F.
Year of Publication: 
2019
Series/Report no.: 
Working Papers in Economics and Statistics No. 2019-14
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.
Subjects: 
business development grants
policy evaluation
two-way fixed effects regression
matching
heterogeneous treatment effects
dose-response-function
JEL: 
C21
G01
H23
H50
O38
Document Type: 
Working Paper

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