Employment Effects of Investment Grants and Firm Heterogeneity – Evidence from a Staggered Treatment Adoption Approach

This study estimates the establishment-level employment effects of investment grants in Germany. In addition to the average treatment effect on the treated, we analyse the influence of establishment’s characteristics and economic environment on the magnitude of the effect. We apply a modification of Heckman’s matching and difference-in-differences approach to consider time-varying treatment and different treatment durations. Our results suggest that investment grants positively impact employment. Moreover, we find strong evidence for effect heterogeneity regarding firms’ internal characteristics as well as the economic environment.

02. February 2023

Authors Eva Dettmann Mirko Titze Antje Weyh

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