Dirk Czarnitzki (Katholieke Universiteit Leuven)

“Counterfactual impact evaluation of cohesion policy at the firm level”

Abstract

The European Cohesion Policy is designed to reduce gaps between developmentlevels of EU regions. Consequently most scholarly research on impacts of Cohesion Policyso far focused on catching-up processes of EU regions. Newly available data, however,allow studying policy effects directly at the recipient level rather than at the macro(regional) level. The data allows differentiating between subsidies given to not-for-profitinstitutions vs. firms, and also enables researchers to distinguish amongdifferent types of support, such as R&D/innovation, training programs, investment intotangible assets, start-up support, social and cultural initiatives and so forth.We link this recipient data to a firm level database and test whether positive treatment effectsof the enterprise support schemes within European Cohesion Policy can be identified at themicroeconomic level, which can be considered as a necessary precondition for catching-upat any higher level of aggregation. Using econometric treatment effectestimators, we find that R&D and innovation support as well as subsidies for investment intophysical assets indeed have positive effects at the firm level. However, for the most commontype of grants, which is support for education and training, we do not find any significant effects.