Do Business Subsidies Facilitate Employment Growth?

We use data from 15508 Finnish companies with 10 or more employees for the years 2003-2008 to explore the relationship between employment growth and three endogenously determined business subsidy types (i.e. employment subsidy, R&D subsidy and other business subsidies). We find a positive contemporary relationship between all business subsidy types and employment growth. Our findings suggest that R&D subsidies further contribute to the firms’ employment for one year after and employment and other subsidies for three years after the reception of subsidies. After that, the differences between the subsidized and non-subsidized firms vanish. We further find, in line with the empirical studies of Harrison et al. (2008) and Hall et al. (2008), that both product innovation and sales growth from a firm’s old products contribute to the firm’s employment growth. Process innovation, instead, does not seem to have any significant effect on employment.

Information om publikationen

Serie
Discussion Papers no. 1235
Datum
2011
Nyckelord
yritystuet, julkinen yritysrahoitus, työ- ja elinkeinopolitiikka, Suomi
Nyckelord
public subsidies, technology policy, employment growth, Finland
JEL
J23,L10,O33,O38
Sidor
20
Pris
10 €
Tillgänglighet av tryckt version
Tillgänglig
Språk
Engelska