Evaluating the additionality of public sector assistance to Irish firms: a question of ownership?

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Abstract

This article presents an innovative approach to estimating the additionality of financial assistance awarded to firms by an Irish regional development agency. The 'self assessment approach' is used to derive estimates of deadweight and displacement for firms in the Shannon region of Ireland. Irish studies have derived high estimates of deadweight by international standards. In light of this, and the fact that successive Irish governments have placed emphasis on Foreign Direct Investment as an engine for growth, the primary objective here is to address the question of whether the type of firm ownership matters with respect to resulting deadweight and/or displacement estimates. The latter question is addressed using logistic regression analysis to test whether, ceteris paribus, firm ownership is a key-determining factor for estimates of deadweight and/or displacement. The results show that ownership does not matter in the case of deadweight, but regarding displacement there are differences between indigenous and foreign-owned firms albeit at very low levels. More precisely, as expected, indigenously owned firms are more likely to lead to higher estimates of displacement.

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Details

Original languageEnglish
Pages (from-to)115-133
Number of pages19
JournalPolicy Studies
Volume27
Issue number2
DOIs
Publication statusPublished - Jun 2006

    Keywords

  • additionality, financial assistance, Irish regional development agency, deadweight, displacement, Ireland, international standards, Foreign Direct Investment, growth

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