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Title: Evaluating the impact of public subsidies on a firm’s performance: A quasi-experimental approach
Author: Duch Brown, Néstor
Montolio, Daniel
Mediavilla, Mauro
Keywords: Política pública
Avaluació de programes
Government policy
Programs evaluation
Issue Date: 2007
Publisher: Institut d’Economia de Barcelona
Series/Report no: [WP E-IEB07/03]
Abstract: Many regional governments in developed countries design programs to improve the competitiveness of local firms. In this paper, we evaluate the effectiveness of public programs whose aim is to enhance the performance of firms located in Catalonia (Spain). We compare the performance of publicly subsidised companies (treated) with that of similar, but unsubsidised companies (non-treated). We use the Propensity Score Matching (PSM) methodology to construct a control group which, with respect to its observable characteristics, is as similar as possible to the treated group, and that allows us to identify firms which retain the same propensity to receive public subsidies. Once a valid comparison group has been established, we compare the respective performance of each firm. As a result, we find that recipient firms, on average, change their business practices, improve their performance, and increase their value added as a direct result of public subsidy programs.
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It is part of: IEB Working Paper 2007/03
Appears in Collections:IEB (Institut d’Economia de Barcelona) – Working Papers

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