IDEAS home Printed from https://ideas.repec.org/p/hhs/huiwps/0024.html
   My bibliography  Save this paper

Do Regional Investment Grants Improve Firm Performance? - Evidence from Sweden

Author

Listed:
  • Ankarhem, Mattias

    (Ministry of Finance)

  • Daunfeldt, Sven-Olov

    (The RATIO Institute)

  • Quoreshi, Shahiduzzaman

    (The National Institute of Economic Research)

  • Rudholm, Niklas

    (The Swedish Retail Institute)

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.

Suggested Citation

  • Ankarhem, Mattias & Daunfeldt, Sven-Olov & Quoreshi, Shahiduzzaman & Rudholm, Niklas, 2009. "Do Regional Investment Grants Improve Firm Performance? - Evidence from Sweden," HUI Working Papers 24, HUI Research.
    • Handle: RePEc:hhs:huiwps:0024
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Richard Harris & Catherine Robinson, 2004. "Industrial Policy In Great Britain And Its Effect On Total Factor Productivity In Manufacturing Plants, 1990–1998," Scottish Journal of Political Economy, Scottish Economic Society, vol. 51(4), pages 528-543, September.
    2. Colin Wren, 2005. "Regional grants: are they worth it?," Fiscal Studies, Institute for Fiscal Studies, vol. 26(2), pages 245-275, June.
    3. Richard Harris & Mary Trainor, 2005. "Capital Subsidies and their Impact on Total Factor Productivity: Firm‐Level Evidence from Northern Ireland," Journal of Regional Science, Wiley Blackwell, vol. 45(1), pages 49-74, February.
    4. Dimitris Skuras & Kostas Tsekouras & Efthalia Dimara & Dimitris Tzelepis, 2006. "The Effects of Regional Capital Subsidies on Productivity Growth: A Case Study of the Greek Food and Beverage Manufacturing Industry," Journal of Regional Science, Wiley Blackwell, vol. 46(2), pages 355-381, May.
    5. Richard Harris & Mary Trainor, 2007. "Impact of Government Intervention on Employment Change and Plant Closure in Northern Ireland, 1983-97," Regional Studies, Taylor & Francis Journals, vol. 41(1), pages 51-63.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. John Moffat, 2015. "Regional Selective Assistance (RSA) in Scotland: Does It Make a Difference to Plant Survival?," Regional Studies, Taylor & Francis Journals, vol. 49(4), pages 568-581, April.
    2. Zdeňka Náglová & Jindřich Špička & Martin Gürtler, 2016. "Evaluation of Effects of Investment Support in the Czech Dairy Industry," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 64(4), pages 1345-1351.
    3. Gosk Beata & Nehrebecka Natalia, 2019. "Are subsidies for Polish enterprises effective: empirical results based on panel data," Central European Economic Journal, Sciendo, vol. 6(53), pages 108-131, January.
    4. Zdeňka Náglová, 2018. "Investment Subsidies in the Meat Industry and Their Impact on Business Economics," Central European Business Review, Prague University of Economics and Business, vol. 2018(1), pages 37-45.
    5. Simon Falck & Hans Westlund, 2013. "Regional Grants And Fdi Location: Evidence From Swedish Regional Policy Programs 2002-2009," Romanian Journal of Regional Science, Romanian Regional Science Association, vol. 7(1), pages 36-68, JUNE.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jindrich SPICKA & Zdenka NAGLOVA & Martin GURTLER, 2017. "Effects of the investment support in the Czech meat processing industry," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 63(8), pages 356-369.
    2. Bernini, Cristina & Cerqua, Augusto & Pellegrini, Guido, 2017. "Public subsidies, TFP and efficiency: A tale of complex relationships," Research Policy, Elsevier, vol. 46(4), pages 751-767.
    3. Zdeňka Náglová, 2018. "Investment Subsidies in the Meat Industry and Their Impact on Business Economics," Central European Business Review, Prague University of Economics and Business, vol. 2018(1), pages 37-45.
    4. Richard Harris & John Moffat, 2020. "The impact of product subsidies on plant‐level total factor productivity in Britain, 1997–2014," Scottish Journal of Political Economy, Scottish Economic Society, vol. 67(4), pages 387-403, September.
    5. Zdeňka Náglová & Marie Šimpachová Pechrová, 2021. "Technical efficiency of the food and drink industry and its determinants," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 67(10), pages 409-422.
    6. Gustavsson Tingvall, Patrik & Videnord, Josefin, 2017. "Regional Effects of Publicly Sponsored R&D Grants on SME Performance," Ratio Working Papers 289, The Ratio Institute.
    7. Ondřej Dvouletý & Stjepan Srhoj & Smaranda Pantea, 2021. "Public SME grants and firm performance in European Union: A systematic review of empirical evidence," Small Business Economics, Springer, vol. 57(1), pages 243-263, June.
    8. Li, Mingyang & Jin, Man & Kumbhakar, Subal C., 2022. "Do subsidies increase firm productivity? Evidence from Chinese manufacturing enterprises," European Journal of Operational Research, Elsevier, vol. 303(1), pages 388-400.
    9. Mattsson, Pontus, 2019. "The impact of labour subsidies on total factor productivity and profit per employee," Economic Analysis and Policy, Elsevier, vol. 62(C), pages 325-341.
    10. Roberto Gabriele & Enrico Tundis, 2015. "the effect of longitudinal multiple subsidies on firm performance in the presence of neighbour interactions," ERSA conference papers ersa15p1368, European Regional Science Association.
    11. Andries Brandsma & d'Artis Kancs & Pavel Ciaian, 2013. "The Role of Additionality in the EU Cohesion Policies: An Example of Firm-Level Investment Support," European Planning Studies, Taylor & Francis Journals, vol. 21(6), pages 838-853, June.
    12. John Moffat, 2015. "Regional Selective Assistance (RSA) in Scotland: Does It Make a Difference to Plant Survival?," Regional Studies, Taylor & Francis Journals, vol. 49(4), pages 568-581, April.
    13. Rudinskaya, T. & Náglová, Z., 2018. "Impact of Subsidies on Technical Efficiency of Meat Processing Companies," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 10(1).
    14. Wen Yue & Jianhua Wang, 2020. "Government Subsidies and Firm-Level Markups: Impact and Mechanism," Sustainability, MDPI, vol. 12(7), pages 1-21, March.
    15. Ondřej Dvouletý & Ivana Blažková, 2019. "The Impact of Public Grants on Firm-Level Productivity: Findings from the Czech Food Industry," Sustainability, MDPI, vol. 11(2), pages 1-24, January.
    16. Chia-Hui Huang, 2015. "Tax credits and total factor productivity: firm-level evidence from Taiwan," The Journal of Technology Transfer, Springer, vol. 40(6), pages 932-947, December.
    17. Roberto Gabriele, & Enrico Tundis, & Enrico Zaninotto, 2015. "Public Subsidies and Development of Hotel Industry: Evidence from a Place-based Policy," DEM Discussion Papers 2015/10, Department of Economics and Management.
    18. Michelle Gilmartin & David Learmouth & J Kim Swales & Peter McGregor & Karen Turner, 2013. "Regional Policy Spillovers: The National Impact of Demand-Side Policy in an Interregional Model of the UK Economy," Environment and Planning A, , vol. 45(4), pages 814-834, April.
    19. Jones, Jonathan & Wren, Colin, 2008. "Re-investment and the survival of foreign-owned plants," LSE Research Online Documents on Economics 33138, London School of Economics and Political Science, LSE Library.
    20. Afonso, Oscar & Silva, Armando, 2012. "Non-scale endogenous growth effects of subsidies for exporters," Economic Modelling, Elsevier, vol. 29(4), pages 1248-1257.

    More about this item

    Keywords

    Economic efficiency; propensity score matching; sample selection; logit regression; panel data;
    All these keywords.

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hhs:huiwps:0024. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Hans Seerar Westerberg (email available below). General contact details of provider: https://edirc.repec.org/data/huistse.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.