Institutional reforms and the employment effects of spatially targeted investment grants: The case of Germany's GRW

• Tác giả: Björn Alecke, Timo Mitze
• Ngôn ngữ: eng
• Ký hiệu phân loại: 832.72 German drama
• Thông tin xuất bản: 2023
• Bộ sưu tập: Metadata
• ID: 196484

Tóm tắt

Spatially targeted investment grant schemes are a common tool to support firms in lagging regions. We exploit exogenous variations in Germany's main regional policy instrument (GRW) arriving from institutional reforms to analyse local employment effects of investment grants. Findings for reduced-form and IV regressions point to a significant policy channel running from higher funding rates to increased firm-level investments and newly created jobs. When we contrast effects for regions with high but declining funding rates to those with low but rising rates, we find that GRW reforms led to diminishing employment increases. Especially small firms responded to changing funding conditions.