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Do Regional Investment Grants Improve Firm Performance? Evidence from Sweden
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Technology and Investment·Volume 01 (2010)·Pages 221–227·Published 27 August 2010·DOI10.4236/ti.2010.13027
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Abstract
The effect of Swedish regional investment grants during 1990-1999 on firm performance, in terms of returns on equity and number of employees, were studied using a propensity-score matching-method to control for sample selection. Firms that received grants did not perform better in terms of returns on equity when compared to matched firms in the control group. In most years, recipient firms also did not hire more employees. The results thus cast doubt on the use of regional investment grants as a general policy instrument to improve firm performance.
KeywordsEconomic EfficiencyPropensity Score MatchingSample SelectionLogit RegressionPanel Data
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