Evaluation of Subsidy Programmes
The work in this group combines high quality research with policy advice. Its overarching objective is to improve the foundation of causal impact analysis of policy intervention in the European Union. The research in this group directly addresses shortcomings regarding the current practice of policy evaluations, particularly in the fields of subsidy programmes and financial markets interventions. Currently, systematic evaluation in these research areas is underdeveloped in the European Union relative to that in other highly developed economies such as the U.S.[1] or U.K.[2]
By developing blueprints, this research group aims at demonstrating how evidence-based policy evaluation that is in line with international evaluation standards can contribute to better informed policy-making. We highlight that this challenge can only be met by an integrated approach combining three dimensions: state-of-the-art econometric methods of causal impact analysis; the management of big data; and multilateral knowledge transfer between the scientific community, policy-makers/administrative staff and society. By bringing together these dimensions, this project will develop sustainable evaluation practices for researchers and policy-makers and act as a data source for the scientific community.
An example for policy advice in the first competence field (evaluation of subsidy programmes) is the causal impact analysis of the "Joint Task of 'Improving the Regional Economic Structure'" (which is the most important regional policy support scheme in Germany). The objective of the project is to use different evaluation techniques to assess the impact of policy measures. Thereby policy gains a better understanding of regional structural changes and regional economic growth.
In the second key area (evaluation of financial market interventions) the project analyses regulatory reforms and effects. Having in mind that after the recent financial crisis, a re-regulation of the financial system took place, it is of utmost importance to evaluate the effectiveness of the reforms as well as to assess whether there are unintended side-effects. In the context of the project “The Political Economy of the European Banking Union” researchers in the financial markets department study how the directives underlying the European Banking Union are implemented across member states as well as whether the new regulatory framework has implications for banking stability and financial intermediation.
IWH Data Project: IWH Subsidy Database
The data project deals with the completion and preparation of comprehensive and unique data sets including information about granted R&D projects and institutional frameworks. The database includes support schemes on federal, federal state, and EU level.[3]
[1] Examples are Mathematica Policy Research (a pioneering nonpartisan research organisation, for details see https://www.mathematica-mpr.com/about-mathematica) or the Commission on Evidence-Based Policymaking established by the bipartisan Evidence-Based Policymaking Commission Act of 2016 (Public Law 114–140, for details see https://www.cep.gov/about.html).
[2] Examples are The Behavioural Insights Team (BIT) (for details see http://www.behaviouralinsights.co.uk/about-us/), the Innovation Growth Lab (IGL) (for details see http://www.innovationgrowthlab.org/innovation-growth-lab), and the What Works Centre for Local Economic Growth (for details see http://www.whatworksgrowth.org/about-us/).
[3] For a description of the database, see https://www.iwh-halle.de/en/research/data-and-analysis/research-data-centre/iwh-subsidy-database/ and Brachert, M.; Giebler, A.; Heimpold, G.; Titze, M.; Urban-Thielicke, D.: IWH-Subventionsdatenbank: Mikrodaten zu Programmen direkter Unternehmenssubventionen in Deutschland. Datendokumentation. IWH Technical Report 2/2018. Halle (Saale) 2018.
Research Cluster
Economic Dynamics and StabilityYour contact
- Department Präsidialbereich
EXTERNAL FUNDING
09.2019 ‐ 09.2022
Establishing Evidence-based Evaluation Methods for Subsidy Programmes in Germany (EVA-KULT)
The project aims at expanding the Centre for Evidence-based Policy Advice at the Halle Institute for Economic Research (IWH-CEP).
01.2018 ‐ 12.2020
Networked growth - Innovative Saxony-Anhalt through digital business models (Competence Center 4.0)
01.2017 ‐ 12.2018
Political Participation in Eastern Germany
12.2015 ‐ 11.2018
Socio-economic Effects of Research on Innovative Approaches for POC Diagnostics
Part of the EXASENS project. Coordinated by the Leibniz Institute of Photonic Technology (IPHT) in Jena, nine Leibniz institutes are working together on researching point-of-care (POC) technology for the prediction and diagnosis of chronic inflammatory respiratory diseases. See press release.
02.2017 ‐ 02.2018
The Importance of Non-University Research Institutions for the Development of Firms and Regions (Be_For_Reg-Projekt)
01.2015 ‐ 12.2016
Evaluation of the "Joint Task 'Improving the Regional Economic Structure'" in the Federal State of Saxony-Anhalt
Refereed Publications
Actors and Interactions – Identifying the Role of Industrial Clusters for Regional Production and Knowledge Generation Activities
in: Growth and Change, No. 2, 2014
Abstract
This paper contributes to the empirical literature on systematic methodologies for the identification of industrial clusters. It combines a measure of spatial concentration, qualitative input–output analysis, and a knowledge interaction matrix to identify the production and knowledge generation activities of industrial clusters in the Federal State of Saxony in Germany. It describes the spatial allocation of the industrial clusters, identifies potentials for value chain industry clusters, and relates the production activities to the activities of knowledge generation in Saxony. It finds only a small overlap in the production activities of industrial clusters and general knowledge generation activities in the region, mainly driven by the high-tech industrial cluster in the semiconductor industry. Furthermore, the approach makes clear that a sole focus on production activities for industrial cluster analysis limits the identification of innovative actors.
Non-union Worker Representation, Foreign Owners, and the Performance of Establishments
in: Oxford Economic Papers, No. 1, 2014
Abstract
Using German establishment data, this study provides the first econometric analysis on the interaction of establishment-level codetermination and foreign owners. Works councils are associated with higher productivity in domestic-owned establishments while they are associated with lower productivity in foreign-owned establishments. Our results conform to the notion that foreign ownership can involve strong tensions with the institutional patterns of the host country.
Adjustments in the Use of Temporary Agency before and during the 2008/2009 Economic Crisis
in: Industrielle Beziehungen, No. 1, 2014
Abstract
Der Anstieg in der Leiharbeitsnutzung in Deutschland bis zur Wirtschaftskrise der Jahre 2008 und 2009 war geprägt durch die verstärkte Nutzung in größeren Industriebetrieben und vollzog sich in erster Linie entlang der intensive margin, also durch eine erhöhte Leiharbeitsintensität in den Nutzerbetrieben. Diese Vorgänge können mit transaktionskostentheoretischen Argumenten und gestiegenem internationalen Wettbewerbsdruck erklärt werden, und sie deuten auf eine gestiegene Produktivität in den Nutzerbetrieben hin. Der drastische Rückgang in der Leiharbeitsnutzung während der Krise betraf vor allem Exporteure und größere Industriebetriebe und vollzog sich primär entlang der extensive margin. Die Beschäftigungschancen im Leiharbeitssektor hingen in besonders starkem Maße von der internationalen Nachfrage nach deutschen Industriegütern ab.
Guest Editorial: Which Regions Benefit from Emerging Industries? Guest Editorial
in: European Planning Studies, No. 11, 2013
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The Impact of R&D Collaboration Networks on the Performance of Firms and Regions: A Meta-Analysis of the Evidence
in: International Journal of Networking and Virtual Organisations, No. 4, 2013
Abstract
Wissensintensive Interaktionen sind mit einer Reihe von Vor- und Nachteilen für die beteiligten Akteure verbunden. Deshalb hat sich ein Literaturstrang entwickelt, welcher der Fragestellung nachgeht, wie sich FuE-Kooperationen auf die Leistungsfähigkeit von Firmen und Regionen auswirken. Diese Studien kommen zu unterschiedlichen Ergebnissen. Das Papier versucht die verschiedenen Ergebnisse der Literatur zusammenzufassen. Ein weiteres Ziel ist es, die in der Literatur verwendeten Methoden zur Bearbeitung der Fragestellung kritisch zu diskutieren. Zudem geht das Papier der Frage nach, inwiefern die in der Literatur verwendeten Methoden und Ansätze die Ergebnisse der Studien beeinflussen. Zur Bearbeitung dieser Fragestellungen wird eine Metaanalyse der relevanten Literatur durchgeführt. Dabei wird gezeigt, dass FuE-Kooperationen einen positiven Effekt auf die Leistungsfähigkeit von Firmen und Regionen haben. Zudem gibt es starke Evidenz dafür, dass die verwendeten Methoden und Ansätze die Ergebnisse der Studien beeinflussen.
Working Papers
Who Benefits from Place-based Policies? Evidence from Matched Employer-Employee Data
in: IWH Discussion Papers, No. 11, 2024
Abstract
We study the wage and employment effects of a German place-based policy using a research design that exploits conditionally exogenous EU-wide rules governing the program parameters at the regional level. The place-based program subsidizes investments to create jobs with a subsidy rate that varies across labor market regions. The analysis uses matched data on the universe of establishments and their employees, establishment-level panel data on program participation, and regional scores that generate spatial discontinuities in program eligibility and generosity. These rich data enable us to study the incidence of the place-based program on different groups of individuals. We find that the program helps establishments create jobs that disproportionately benefit younger and less-educated workers. Funded establishments increase their wages but, unlike employment, wage gains do not persist in the long run. Employment effects estimated at the local area level are slightly larger than establishment-level estimates, suggesting limited spillover effects. Using subsidy rates as an instrumental variable for actual subsidies indicates that it costs approximately EUR 25,000 to create a new job in the economically disadvantaged areas targeted by the program.
Employment Effects of Investment Grants and Firm Heterogeneity – Evidence from a Staggered Adoption Approach
in: IWH Discussion Papers, No. 6, 2023
Abstract
<p>This study estimates the firm-level employment effects of investment grants in Germany. In addition to the average treatment effect on the treated, we examine discrimination in the funding rules as potential source of effect heterogeneity. We combine a staggered difference-in-differences approach that explicitly models variations in treatment timing with a matching procedure at the cohort level. The findings reveal a positive effect of investment grants on employment development in the full sample. The subsample analysis yields strong evidence for heterogeneous effects based on firm characteristics and the economic environment. This can help to improve the future design of the program.</p>
flexpaneldid: A Stata Toolbox for Causal Analysis with Varying Treatment Time and Duration
in: IWH Discussion Papers, No. 3, 2020
Abstract
The paper presents a modification of the matching and difference-in-differences approach of Heckman et al. (1998) for the staggered treatment adoption design and a Stata tool that implements the approach. This flexible conditional difference-in-differences approach is particularly useful for causal analysis of treatments with varying start dates and varying treatment durations. Introducing more flexibility enables the user to consider individual treatment periods for the treated observations and thus circumventing problems arising in canonical difference-in-differences approaches. The open-source flexpaneldid toolbox for Stata implements the developed approach and allows comprehensive robustness checks and quality tests. The core of the paper gives comprehensive examples to explain the use of the commands and its options on the basis of a publicly accessible data set.
Who Benefits from GRW? Heterogeneous Employment Effects of Investment Subsidies in Saxony Anhalt
in: IWH Discussion Papers, No. 27, 2017
Abstract
The paper estimates the plant level employment effects of investment subsidies in one of the most strongly subsidized German Federal States. We analyze the treated plants as a whole, as well as the influence of heterogeneity in plant characteristics and the economic environment. Modifying the standard matching and difference-in-difference approach, we develop a new procedure that is particularly useful for the evaluation of funding programs with individual treatment phases within the funding period. Our data base combines treatment, employment and regional information from different sources. So, we can relate the absolute effects to the amount of the subsidy paid. The results suggest that investment subsidies have a positive influence on the employment development in absolute and standardized figures – with considerable effect heterogeneity.
Identifying the Effects of Place-based Policies – Causal Evidence from Germany
in: IWH Discussion Papers, No. 18, 2016
Abstract
The German government provides discretionary investment grants to structurally weak regions to reduce regional disparities. We use a regression discontinuity design that exploits an exogenous discrete jump in the probability of receiving investment grants to identify the causal effects of the investment grant on regional outcomes. We find positive effects for regional gross value-added and productivity growth, but no effects for employment and gross wage growth.
