Committing to Grow: Privatizations and Firm Dynamics in East Germany
Ufuk Akcigit, Harun Alp, André Diegmann, Nicolas Serrano-Velarde
IWH Discussion Papers,
Nr. 17,
2023
Abstract
This paper investigates a unique policy designed to maintain employment during the privatization of East German firms after the fall of the Iron Curtain. The policy required new owners of the firms to commit to employment targets, with penalties for non-compliance. Using a dynamic model, we highlight three channels through which employment targets impact firms: distorted employment decisions, increased productivity, and higher exit rates. Our empirical analysis, using a novel dataset and instrumental variable approach, confirms these findings. We estimate a 22% points higher annual employment growth rate, a 14% points higher annual productivity growth, and a 3.6% points higher probability of exit for firms with binding employment targets. Our calibrated model further demonstrates that without these targets, aggregate employment would have been 15% lower after 10 years. Additionally, an alternative policy of productivity investment subsidies proved costly and less effective in the short term.
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Evidenzbasierte Politikberatung (IWH-CEP)
Zentrum für evidenzbasierte Politikberatung (IWH-CEP) ...
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Etablierung einer evidenzbasierten Evaluationskultur für industriepolitische Fördermaßnahmen in Deutschland (EVA-KULT)
EVA-KULT Etablierung einer evidenzbasierten Evaluationskultur für...
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IWH-Subventionsdatenbank
IWH-Subventionsdatenbank ...
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Urban-Thielicke
IWH-Subventionsdatenbank: Mikrodaten zu Programmen direkter Unternehmenssubventionen in Deutschland. Datendokumentation ...
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IWH-Subventionsdatenbank: Mikrodaten zu Programmen direkter Unternehmenssubventionen in Deutschland. Datendokumentation
Matthias Brachert, Alexander Giebler, Gerhard Heimpold, Mirko Titze, Dana Urban-Thielicke
IWH Technical Reports,
Nr. 2,
2018
Abstract
Nahezu alle entwickelten Volkswirtschaften haben Programme zur Förderung von Projekten in Unternehmen im Rahmen von Industriepolitik eingeführt. Allerdings ist sehr wenig darüber bekannt, welche Programme eigentlich genau zur Anwendung kommen, welche finanziellen Mittel dafür aufgebracht werden und ob die Programme in der Art und Weise wirken, wie sie ursprünglich intendiert waren. Evaluationsstudien, die auf kausalen Untersuchungsdesigns basieren, können einen wertvollen Beitrag zur Beantwortung der Frage leisten, ob ein Programm tatsächlich Wirkungen entfaltet und welcher der verschiedenen Ansätze am erfolgversprechendsten ist. Dieser Datenreport stellt die vom Zentrum für evidenzbasierte Politikberatung am Leibniz-Institut für Wirtschaftsforschung Halle (IWH-CEP) entwickelte IWH-Subventionsdatenbank vor. Die Datenbank enthält (Stand November 2018) zehn Programme industriepolitischer Maßnahmen, die in Deutschland zur Anwendung kamen bzw. kommen. Der Report geht auf die Förderregeln dieser Programme ein und beschreibt die Prozeduren der Zusammenführung zu einer Masterdatei. Ferner diskutiert der Report Möglichkeiten der Verknüpfung der Förderdaten mit externen Unternehmensdatensätzen, die eine zwingende Voraussetzung für die Durchführung von Wirkungsanalysen darstellen, da die administrativen Förderdaten nicht alle Informationen enthalten, die für kausale Untersuchungsdesigns notwendig sind.
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Public Investment Subsidies and Firm Performance – Evidence from Germany
Matthias Brachert, Eva Dettmann, Mirko Titze
Jahrbücher für Nationalökonomie und Statistik,
Nr. 2,
2018
Abstract
This paper assesses firm-level effects of the single largest investment subsidy programme in Germany. The analysis considers grants allocated to firms in East German regions over the period 2007 to 2013 under the regional policy scheme Joint Task ‘Improving Regional Economic Structures’ (GRW). We apply a coarsened exact matching (CEM) in combination with a fixed effects difference-in-differences (FEDiD) estimator to identify the effects of programme participation on the treated firms. For the assessment, we use administrative data from the Federal Statistical Office and the Offices of the Länder to demonstrate that this administrative database offers a huge potential for evidence-based policy advice. The results suggest that investment subsidies have a positive impact on different dimensions of firm development, but do not affect overall firm competitiveness. We find positive short- and medium-run effects on firm employment. The effects on firm turnover remain significant and positive only in the medium-run. Gross fixed capital formation responses positively to GRW funding only during the mean implementation period of the projects but becomes insignificant afterwards. Finally, the effect of GRW-funding on labour productivity remains insignificant throughout the whole period of analysis.
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Who Benefits from GRW? Heterogeneous Employment Effects of Investment Subsidies in Saxony Anhalt
Eva Dettmann, Mirko Titze, Antje Weyh
IWH Discussion Papers,
Nr. 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.
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Identifying the Effects of Place-based Policies – Causal Evidence from Germany
Matthias Brachert, Eva Dettmann, Mirko Titze
IWH Discussion Papers,
Nr. 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.
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