Do Government Subsidies Stimulate Training Expenditure? Microeconometric Evidence from Plant-Level Data |
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Authors: | Holger Grg Eric Strobl |
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Institution: | Holger Görg,Eric Strobl |
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Abstract: | This paper examines whether financial assistance provided by government induces firms to spend more of their own funds on training expenditures, using plant-level data for the Republic of Ireland. We pay particular attention to the potential problems in such an evaluation study, namely selectivity and endogeneity, by first identifying a valid counterfactual for grant receiving plants via a matching estimator and then employing a difference-in-differences technique on this matched sample. Our results show that there are differences in causal effects between domestic and foreign-owned plants. For the former, we find clear evidence that grant receipt stimulates private expenditure, whereas there are no statistically significant effects for foreign-owned plants based in Ireland. |
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