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Dopad investičních pobídek na objem investic v České republice
[The Effect of Investment Incentives on Investment in Czech Republic]

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Listed:
  • Peter Bolcha
  • Alena Zemplinerová

Abstract

The policy of investment incentives is applied in majority of countries all over the world. This popularity is in contradiction with rare academic analyses. This paper sheds some light on causal impact of such policy on investment of supported firms in Czech Republic. We use individual level panel data containing crucial observables about the firm behaviour. We overcome the selection problem by application of propensity score matching. Our comparison of investment behaviour of supported firms and firms from control group shows that the extra investment generated (or maybe only accelerated) was at most 26% of contracted amounts. Even with constraints and assumptions we explicitly discuss in our work, this indicates that the arguments for the provision of this policy in Czech economy are not valid. These findings are in line with mixed (but mostly similar) empirical evidence from other countries.

Suggested Citation

  • Peter Bolcha & Alena Zemplinerová, 2012. "Dopad investičních pobídek na objem investic v České republice [The Effect of Investment Incentives on Investment in Czech Republic]," Politická ekonomie, Prague University of Economics and Business, vol. 2012(1), pages 81-100.
    • Handle: RePEc:prg:jnlpol:v:2012:y:2012:i:1:id:833:p:81-100
    DOI: 10.18267/j.polek.833
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    References listed on IDEAS

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    More about this item

    Keywords

    foreign direct investment; investment incentives; subsidy; matching estimator;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies

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