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Employment effects of investment grants and firm heterogeneity: Evidence from a staggered adoption approach

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  • Dettmann, Eva
  • Titze, Mirko
  • Weyh, Antje

Abstract

This study estimates the firm-level employment effects of investment grants in Germany. In addition to the average treatment effect on the treated, we examine discrimination in the funding rules as potential source of effect heterogeneity. We combine a staggered difference-in-differences approach that explicitly models variations in treatment timing with a matching procedure at the cohort level. The findings reveal a positive effect of investment grants on employment development in the full sample. The subsample analysis yields strong evidence for heterogeneous effects based on firm characteristics and the economic environment. This can help to improve the future design of the program.

Suggested Citation

  • Dettmann, Eva & Titze, Mirko & Weyh, Antje, 2024. "Employment effects of investment grants and firm heterogeneity: Evidence from a staggered adoption approach," IWH Discussion Papers 6/2023, Halle Institute for Economic Research (IWH), revised 2024.
    • Handle: RePEc:zbw:iwhdps:62023
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    File URL: https://www.econstor.eu/bitstream/10419/304380/1/iwh-dp2023-06rev.pdf
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    References listed on IDEAS

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    1. Annette Bergemann & Bernd Fitzenberger & Stefan Speckesser, 2009. "Evaluating the dynamic employment effects of training programs in East Germany using conditional difference-in-differences," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 24(5), pages 797-823.
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    Cited by:

    1. Brachert, Matthias & Dettmann, Eva & Schneider, Lutz & Titze, Mirko, 2024. ""Evaluation der Gemeinschaftsaufgabe 'Verbesserung der regionalen Wirtschaftsstruktur' (GRW)" durch einzelbetriebliche Erfolgskontrolle: Evaluationsbericht," IWH Studies 3/2024, Halle Institute for Economic Research (IWH).
    2. Andres, Raphaela & Niebel, Thomas & Viete, Steffen, 2024. "Do capital incentive policies support today’s digitization needs?," Telecommunications Policy, Elsevier, vol. 48(1).

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    More about this item

    Keywords

    causal inference; heterogeneous effects; place-based policy; staggered difference-in-differences; variation in treatment timing;
    All these keywords.

    JEL classification:

    • A11 - General Economics and Teaching - - General Economics - - - Role of Economics; Role of Economists
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • Z0 - Other Special Topics - - General

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