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Getting ready for EU Single Market: The effect of export-oriented grant schemes on firm performance

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  • Srhoj, Stjepan
  • Walde, Janette

Abstract

In this paper we analyze the impact of an export-oriented grant scheme created in anticipation of accession of a country to the European Union. The scheme aimed to support activities for the introduction of new or existing products to foreign markets and technology development. We find this new policy exerted a positive effect on firm export value, total sales, value added and profits. The policy design differentiates two types of supported activities. Technology-oriented grants have a positive effect on exports and capital stock, while commercialization-oriented grants have a positive effect on exports and intermediate inputs. We have no evidence for an effect on employment and only a slight effect on total factor productivity. Overall grants targeted at technological development have more relevant economic effects than do grants for commercialization activities. A cost-benefit analysis suggests that the benefits created in value added are 139.5% of the grant scheme cost.

Suggested Citation

  • Srhoj, Stjepan & Walde, Janette, 2020. "Getting ready for EU Single Market: The effect of export-oriented grant schemes on firm performance," Structural Change and Economic Dynamics, Elsevier, vol. 52(C), pages 279-293.
    • Handle: RePEc:eee:streco:v:52:y:2020:i:c:p:279-293
    DOI: 10.1016/j.strueco.2019.11.001
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    Cited by:

    1. Stjepan Srhoj & Vanja Vitezic & Joachim Wagner, 2020. "Export boosting policies and firm behaviour: Review of empirical evidence around the world," Working Paper Series in Economics 395, University of Lüneburg, Institute of Economics.
    2. Peter Grajzl & Stjepan Srhoj & Jaka Cepec & Barbara Mörec, 2024. "A by-product of big government: the attenuating role of public procurement for the effectiveness of grants-based entrepreneurship policy," Small Business Economics, Springer, vol. 62(3), pages 895-916, March.
    3. Mahmutaj Lura Rexhepi & Krasniqi Besnik, 2020. "Innovation Types and Sales Growth in Small Firms: Evidence from Kosovo," South East European Journal of Economics and Business, Sciendo, vol. 15(1), pages 27-43, June.
    4. Stjepan Srhoj & Alex Coad & Janette Walde, 2024. "HGX: the anatomy of high growth exporters," Small Business Economics, Springer, vol. 63(4), pages 1695-1720, December.
    5. Stjepan Srhoj & Michal Lapinski & Janette Walde, 2021. "Impact evaluation of business development grants on SME performance," Small Business Economics, Springer, vol. 57(3), pages 1285-1301, October.
    6. Stjepan Srhoj & Bruno Škrinjarić & Sonja Radas & Janette Walde, 2022. "Small matching grants for women entrepreneurs: lessons from the past recession," Small Business Economics, Springer, vol. 59(1), pages 117-142, June.
    7. Marko Peric & Vanja Vitezic & Ana Peric Hadzic, 2020. "Firm Size €“ Firm Growth Relationship During Economic Crisis," Economic Thought and Practice, Department of Economics and Business, University of Dubrovnik, vol. 29(1), pages 29-53, june.
    8. Ferraro, Simona & Männasoo, Kadri & Tasane, Helery, 2023. "How the EU Cohesion Policy targeted at R&D and innovation impacts the productivity, employment and exports of SMEs in Estonia," Evaluation and Program Planning, Elsevier, vol. 97(C).
    9. Peter Grajzl & Jaka Cepec & Barbara Mörec, 2023. "Weaned off public money: The effect of discontinued reception of public cash on firm outcomes," Kyklos, Wiley Blackwell, vol. 76(1), pages 41-76, February.

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    More about this item

    Keywords

    Export-oriented grants; Policy evaluation; Difference in differences matching estimator; EU Accession;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • G01 - Financial Economics - - General - - - Financial Crises
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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