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Support to enterprise – a counterfactual approach

Explore the impact of €79 billion expenditure on grants for enterprises in 2007-13 using a counterfactual approach, analyzing job creation and investment outcomes with scientific rigor.

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Support to enterprise – a counterfactual approach

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  1. Ex post evaluation – WP 6c Support to enterprise – a counterfactual approach Daniel Mouqué Evaluation Unit, DG REGIO

  2. Enterprise & innovation support • Some €79 billion in 2007-13: the largest broad category of expenditure • Key instrument: the grant (others include: loans/VC, advice, networking, incubators) • Previously, evidence for success was mainly: • Monitoring data • Interviews on deadweight

  3. The evaluation • 2 grants (modernisation, R&D) in E. Germany • 2 databases: IAB enterprise « panel », GEFRA survey of innovation in Thuringia • Focus groups with project and prog managers • 2 scientific experts

  4. What is a counterfactual? • Used in many methods (but often implicit or qualitative) • New tool borrowed from medicine and science. Key feature: control group (think drug trial) • Harnessing the power of statistics (pro: credible, con: data-heavy) • Selecting matches: can range from very simple to very complex.

  5. Main methods of this evaluation • Controlled difference in difference (take a simple method, add regression) • Propensity Score Matching (using statistics to find “twins”) • Instrumental Variable (using grants to female entrepreneurs)

  6. Results: investment grants

  7. Results: R&D grants

  8. Results: employment • An estimated 27,000 jobs created • Significantly lower than monitoring data for jobs created (107,000). Reconciliation: gross/net. • Cannot reconcile with number of jobs safeguarded (439,000) => Strong conclusion: main effect of grants is investment (and productivity) change, not jobs

  9. In conclusion • Interesting results • An interesting method (potentially more rigorous, gives clear headline figures) • But data-heavy, so not appropriate in every case

  10. Where to find the evaluation Inforegio, then the following steps: > The Policy > Impacts and results > Evaluation > Evaluations undertaken for the Commission > 2000-2006

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