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Impact identification strategies for evaluating business incentive programs

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  • Bondonio, Daniele
Abstract
Although business incentive programs of different forms have been the bulk of local economic development policies in many industrialized countries for more than the last three decades, evaluating their impact on employment or local economic growth outcomes remains a challenging task due to the persisting lack of randomized experiments and the presence of many confounding factors which affect firms and economic growth outcomes. Moreover, much of the recent advancements in the statistical program evaluation methodology applicable to non-experimental settings do not make any direct reference to the specificities posed by business incentive policies. This paper aims at offering some clear guidance on how to choose the appropriate focus of the evaluation, the policy relevant evaluation parameters and empirical impact identification strategies when applying statistical methods attempting to estimate how much of the different outcomes between treatment and control groups are attributable to the program/s being evaluated. Each methodological option discussed in the paper is linked to the different features of commonly implemented US and EU policies and to whether or not the analysis focuses on outcomes recorded at a firm-level or at the level of the geographic areas in which the assisted firms are located.

Suggested Citation

  • Bondonio, Daniele, 2009. "Impact identification strategies for evaluating business incentive programs," POLIS Working Papers 129, Institute of Public Policy and Public Choice - POLIS.
    • Handle: RePEc:uca:ucapdv:129
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    Cited by:

    1. Federico Biagi & Daniele Bondonio & Alberto Martini, 2015. "Counterfactual Impact Evaluation of Enterprise Support Programmes. Evidence from a Decade of Subsidies to Italian Firm," ERSA conference papers ersa15p1619, European Regional Science Association.
    2. Augusto Cerqua & Guido Pellegrini, 2017. "Industrial policy evaluation in the presence of spillovers," Small Business Economics, Springer, vol. 49(3), pages 671-686, October.
    3. Cerqua, Augusto & Pellegrini, Guido, 2014. "Do subsidies to private capital boost firms' growth? A multiple regression discontinuity design approach," Journal of Public Economics, Elsevier, vol. 109(C), pages 114-126.
    4. Orso, Cristina Elisa, 2009. "Formal and informal sectors: Interactions between moneylenders and traditional banks in the rural Indian credit market," POLIS Working Papers 135, Institute of Public Policy and Public Choice - POLIS.
    5. Marchese Carla & Ramello Giovanni B., 2011. "In the Beginning Was the Word. Now is the Copyright," Review of Law & Economics, De Gruyter, vol. 7(1), pages 271-289, October.
    6. Augusto Cerqua & Guido Pellegrini, 2013. "Beyond the SUTVA: how industrial policy evaluations change when we allow for interaction among firms," ERSA conference papers ersa13p340, European Regional Science Association.
    7. Liliana-Olivia Lucaciu, 2019. "Reducing Regional Disparities: SME’s Support Funding Distribution and Effects in the Regions," Book chapters-LUMEN Proceedings, in: Camelia Ignatescu (ed.), 12th LUMEN International Scientific Conference Rethinking Social Action. Core Values in Practice | RSACVP 2019 | 15-17 May 2019 | Iasi – Romania, edition 1, volume 9, chapter 17, pages 180-196, Editura Lumen.
    8. Guido Pellegrini & Augusto Cerqua, 2011. "Are the subsidies to private capital useful? A Multiple Regression Discontinuity Design Approach1," ERSA conference papers ersa11p1323, European Regional Science Association.
    9. Giuranno, Michele, 2009. "The logic of party coalitions with political activism and public financing," POLIS Working Papers 134, Institute of Public Policy and Public Choice - POLIS.
    10. Augusto Cerqua & Guido Pellegrini, 2014. "Beyond the SUTVA: how policy evaluations change when we allow for interactions among firms," Working Papers 2/14, Sapienza University of Rome, DISS.
    11. Daniele Bondonio & Federico Biagi & Juraj Stancik, 2016. "Counterfactual Impact Evaluation of Public Funding of Innovation, Investment and R&D," JRC Research Reports JRC99564, Joint Research Centre.
    12. Ondřej Dvouletý, 2017. "Effects of Soft Loans and Credit Guarantees on Performance of Supported Firms: Evidence from the Czech Public Programme START," Sustainability, MDPI, vol. 9(12), pages 1-17, December.

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    More about this item

    Keywords

    Impact evaluation; Business Incentives Policies; Comparison-group designs; Identification strategies;
    All these keywords.

    JEL classification:

    • C40 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - General
    • C80 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - General
    • H81 - Public Economics - - Miscellaneous Issues - - - Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts

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