In this paper we examine causal effects of German public assistance programs for young firms administered by the Deutsche Ausgleichsbank (DtA). The empirical analysis is based on a combined data set with information from the ZEW Entrepreneurship Study and the DtA data base that contains all assistance contracts between 1990 and 1999. We focus on medium-term program effects on the survival chances and the average annual employment growth rates of assisted firms. In order to estimate causal effects a statistical matching procedure is used to draw an adequate control group from the pool of all available control firms for comparison with the treatment group of assisted firms. The empirical analysis shows significant positive effects of public assistance on the survival chances and the average annual employment growth rates of young German firms.
Almus, Matthias and Susanne Prantl (2001), Die Auswirkungen öffentlicher Gründungsförderung auf das Überleben und Wachstum junger Unternehmen, ZEW Discussion Paper No. 01-03, Mannheim. Download