A by-product of big government: the attenuating role of public procurement for the effectiveness of grants-based entrepreneurship policy.

ABSTRACT: We study the contextual role of public procurement for the effectiveness of grants-based entrepreneurship policy. Drawing on the resource-based view of the firm, we argue that partaking in procurement can erode grant effectiveness by relaxing a firm's preexisting financial constraints and diverting managerial attention away from market-centered resource configurations. To test our hypothesis, we use detailed firm-level data from Slovenia and combine matching with difference-in-differences. When firms are not involved in procurement, all investigated types of grants meet the intended policy goals, apart from productivity growth. In contrast, when firms participate in procurement, small-business grants exhibit generally weaker effects, R&D grants fail to have any impact, and employment grant

SUBMITTER: Grajzl P 

PROVIDER: S-EPMC10227805 | biostudies-literature | 2023 May

REPOSITORIES: biostudies-literature