TITLE:
Do Regional Investment Grants Improve Firm Performance? Evidence from Sweden
AUTHORS:
Mattias Ankarhem, Sven-Olov Daunfeldt, Shahiduzzaman Quoreshi, Niklas Rudholm
KEYWORDS:
Economic Efficiency, Propensity Score Matching, Sample Selection, Logit Regression, Panel Data
JOURNAL NAME:
Technology and Investment,
Vol.1 No.3,
August
27,
2010
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.