Lenihan, Helena. 'Modelling the factors associated with deadweight and displacement: an Irish industrial policy evaluation'. - Dublin: Journal of the Statistical and Social Inquiry Society of Ireland,Vol. XXXIII, 2003/2004, pp40-82
Journal of the Statistical and Social Inquiry Society of Ireland Vol. XXXIII 2003/2004
Evaluating industrial policy interventions has become a growing theme for
academics and policymakers. Evaluation should explore the ‘counter-factual’; this involves
examining the related phenomena of deadweight and displacement. Research to date has
almost exclusively concerned itself with deriving headline estimates of these phenomena
(particularly deadweight in the Irish context) and discussing their consequences. The main
argument in this paper is that it is no longer sufficient to merely derive estimates of
deadweight and displacement and to discuss their consequences; the focus of attention should
now turn to establishing specific firm factors (e.g. size of firm; type of firm ownership; type
of assistance received) that influence these estimates. It is only then that real policy
improvements and learning can occur. To this end, the explicit focus of this paper is to
ascertain whether certain firm characteristics are likely to influence the likelihood of
deadweight and/or displacement effects. The methodological approach developed has broadbased
applicability beyond the Irish context, given that the econometric techniques adopted
are adaptable to the evaluation of various types of policy interventions in a variety of
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