Journal of International Entrepreneurship

, Volume 8, Issue 4, pp 371–391 | Cite as

The effect of grant receipt on start-up size: Evidence from plant level data

  • Sourafel Girma
  • Holger Görg
  • Aoife Hanley
  • Eric Strobl


In this paper, we use plant level data on the start-up size of new plant entries and detailed information on the grants received by such plants in order to investigate whether grant receipt encourages plants to start-up with more employment than without support. The data relate to manufacturing plants in the Republic of Ireland, where industrial policy has a long history of using discretionary grants to encourage employment growth. We use a matching procedure to deal with the issue of selectivity into grant receipt and a quantile regression estimator to allow for different effects of grants on plants depending on their position in the start-up size distribution. Our results provide evidence that grants do indeed encourage plants to start-up larger. We also find that this effect is generally higher for foreign than for domestic plants and that it differs for plants at different quantiles of the start-up size distribution.


Grants Subsidies Entry Start-up size 


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Copyright information

© Springer Science+Business Media, LLC 2010

Authors and Affiliations

  • Sourafel Girma
    • 1
  • Holger Görg
    • 2
  • Aoife Hanley
    • 2
  • Eric Strobl
    • 3
  1. 1.University of NottinghamNottinghamUK
  2. 2.Kiel Institute for the World Economy and Christian-Albrechts University KielKielGermany
  3. 3.Ecole Polytechnique Paris and SALISESParisFrance

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