The Effect of Investment Incentives on Investment in Czech Republic

Bibliographic Data

ID6109534
AuthorsPeter Bolcha (0000-0002-8890-3217), Alena Zemplinerová (0000-0002-2440-8874)
Year2012
Volume60
Issue1
Pages81-100
Publication date2012-02-01
Open AccessYes
TypeARTICLE
VenuePolitická ekonomie (JOURNAL)
Journal identifiersISSN: 0032-3233 • E-ISSN: 2336-8225
PublisherPrague University of Economics and Business (PUBLISHER • CZ)
DOI10.18267/j.polek.833
OpenAlexW1527885387
LanguageEN
Citations received1
References cited19

The policy of investment incentives is applied in majority of countries all over the world. This popularity is in contradiction with rare academic analyses. This paper sheds some light on causal impact of such policy on investment of supported firms in Czech Republic. We use individual level panel data containing crucial observables about the firm behaviour. We overcome the selection problem by application of propensity score matching. Our comparison of investment behaviour of supported firms and firms from control group shows that the extra investment generated (or maybe only accelerated) was at most 26% of contracted amounts. Even with constraints and assumptions we explicitly discuss in our work, this indicates that the arguments for the provision of this policy in Czech economy are not valid. These findings are in line with mixed (but mostly similar) empirical evidence from other countries

Contradiction · Czech · Econometrics · Economics · Empirical evidence · Incentive · Investment (military) · Matching (statistics) · Microeconomics · Panel data · Political science · Politics · Popularity · Propensity score matching · Public economics · Work (physics) · Corporate Taxation and Avoidance · Economic Growth and Productivity · Fiscal Policy and Economic Growth

Tools

Open DOIOpen Access