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FIML estimation of a bivariate probit selection rule: an application on firm growth and subsidisation

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  • Reize, Frank

Abstract

This study applies a full information maximum likelihood (FIML) estimator of the sample selection model with bivariate selection rule for the investigation of the impact of subsidised firm foundation from unemployment on employment growth of the firm. The empirical analysis is based on the ZEW Firm Start-up Panel using a cohort of firms founded in 15 labour market districts during 1993 and 1995. Estimation results show that the use of the FIML estimator is clearly warranted, compared to a two-step estimator. The FIML model yields a significant negative impact of bridging allowance on employment growth, whereas the two-step estimator underestimates the impact.

Suggested Citation

  • Reize, Frank, 2001. "FIML estimation of a bivariate probit selection rule: an application on firm growth and subsidisation," ZEW Discussion Papers 01-13, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:5368
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    Cited by:

    1. Carmen Aina & Chiara Mussida & Gabriele Lombardi, 2023. "Are Business and Economics Alike?," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 9(2), pages 557-585, July.
    2. Engel, Dirk, 2002. "The Impact of Venture Capital on Firm Growth: An Empirical Investigation," ZEW Discussion Papers 02-02, ZEW - Leibniz Centre for European Economic Research.
    3. Favaro, Donata & Sciulli, Dario & Bartolucci, Francesco, 2020. "Primary-school class composition and the development of social capital," Socio-Economic Planning Sciences, Elsevier, vol. 72(C).
    4. Hongbin Cai & J. Vernon Henderson & Qinghua Zhang, 2013. "China's land market auctions: evidence of corruption?," RAND Journal of Economics, RAND Corporation, vol. 44(3), pages 488-521, September.
    5. Engel, Dirk, 2002. "Zur Rolle von Beteiligungskapitalgebern in ihren Portfoliounternehmen: Eine ökonometrische Analyse," ZEW Discussion Papers 02-58, ZEW - Leibniz Centre for European Economic Research.
    6. Almus, Matthias, 2001. "Das Wachstum junger Unternehmen: Eine Bestandsaufnahme 10 Jahre nach der Wiedervereinigung," ZEW Discussion Papers 01-40, ZEW - Leibniz Centre for European Economic Research.
    7. Spiros Bougheas & Yannis Georgellis, 2004. "Early Career Mobility and Earnings Profiles of German Apprentices: Theory and Empirical Evidence," LABOUR, CEIS, vol. 18(2), pages 233-263, June.
    8. Woojin Chung & Monica Das Gupta, 2011. "Factors influencing 'missing girls' in South Korea," Applied Economics, Taylor & Francis Journals, vol. 43(24), pages 3365-3378.
    9. Joel Stiebale & Frank Reize, 2008. "The Impact of FDI on Innovation in Target Firms," Ruhr Economic Papers 0050, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    10. repec:zbw:rwirep:0050 is not listed on IDEAS
    11. Almus, Matthias, 2001. "Evaluating the impact of public start-up assistance: results from an econometric approach," ZEW Discussion Papers 01-23, ZEW - Leibniz Centre for European Economic Research.
    12. Stiebale, Joel & Reize, Frank, 2008. "The Impact of FDI on Innovation in Target Firms," Ruhr Economic Papers 50, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.

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    More about this item

    JEL classification:

    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy
    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions

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