The Impact of Public Grants on Firm-Level Productivity: Findings from the Czech Food Industry

Result code in IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F62156489%3A43310%2F19%3A43914927" target="_blank" >RIV/62156489:43310/19:43914927 - isvavai.cz</a>

Alternative codes found

RIV/61384399:31130/19:00053685

Result on the web

<a href="https://doi.org/10.3390/su11020552" target="_blank" >https://doi.org/10.3390/su11020552</a>

DOI - Digital Object Identifier

<a href="http://dx.doi.org/10.3390/su11020552" target="_blank" >10.3390/su11020552</a>

Result language

angličtina

Original language name

The Impact of Public Grants on Firm-Level Productivity: Findings from the Czech Food Industry

Original language description

Studying the effects of public entrepreneurship and small- and medium-sized enterprise (SME) policies on productivity (i.e., technological efficiency) is important, because the investment policies primarily aim to reduce allocation inefficiencies, enable usage of economies of scale, promote new production methods and technological development. We reviewed the recently published studies, and we show that they often lack fundamental information, such as a sample description and numbers of supported and non-supported firms. Keeping in mind the importance of transparent and rigorous empirical evaluations, we evaluated the effects of investment support from the European Regional and Development Fund (ERDF) on the productivity of the firms operating in the Czech food processing industry two years after the end of the programme. Methodologically, we apply the propensity score matching approach (PSM) combined with a difference in differences approach (DID) based on the firm-level data accounting for 157 firms (i.e., 77.3% of all beneficiaries within the industry) and a control sample of 1224 firms that have not been supported by the intervention. We use three measures of productivity-production efficiency, labour productivity and total factor productivity (TFP). The obtained findings showed that investment subsidy had a positive impact on labour productivity of supported firms. However, the effects on TFP were negative. The impact on production efficiency indicator was proven to be inconclusive. It follows from the results that the productivity of subsidised firms did not improve through an internal increase in efficiency (efficiency of the use of inputs), which indicates no significant technological change. The subsidy decision-making processes should be more careful and transparent to ensure allocating resources only to the projects with growth potential.

Czech name

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Czech description

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Type

J_imp - Article in a specialist periodical, which is included in the Web of Science database

CEP classification

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OECD FORD branch

50204 - Business and management

Project

—

Continuities

S - Specificky vyzkum na vysokych skolach

Publication year

2019

Confidentiality

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Name of the periodical

Sustainability

ISSN

2071-1050

e-ISSN

—

Volume of the periodical

11

Issue of the periodical within the volume

2

Country of publishing house

CH - SWITZERLAND

Number of pages

24

Pages from-to

552

UT code for WoS article

000457129900256

EID of the result in the Scopus database

2-s2.0-85060310507