The policy of investment incentives is applied in majority of countries all over the world. This popularity is in contradiction with rare academic analyses of this phenomenon and those few existing are not reflected by the actual policy. This work intends to partially fill the first gap and is devoted to estimation of fiscal impact of the policy and also its effects on employment. It contains a proposal of cost-benefit calculation and its application in Czech Republic. The necessary condition for any application of this method, one needs to assess causal impact of such policy on investment and also indirect effects in the labour market. Comparison of investment behavior of supported firms and firms from control group (chosen by matching estimator) shows that the extra investment generated (or maybe only accelerated) was at most 30% of contracted amounts. Indirect effects in labour market are estimated via dynamic model of employment using Heckman's treatment of selection. Inquireies show that linkage effects dominate the crowding out effects, signalling that domestic firms on average benefit from the presence of their foreign conterparts. Turning to supported vs. nonsupported firms, this effect diminishes. For estimation of various scenarios of fiscal and employment effects I use results from econometric estimates of this work as well as the other works from Czech environment. The unitary fiscal cost of one job created is several hundred tousand CZK and therefore the net cost has to be confronted with other potencial benefits of policy. With respect to fact that majority of firms resides and operates in Czech Republic prior the incentive award, technological transfer or other positive effects do not find much support in my findings. This indicates that the arguments for the provision of this policy in Czech economy are not valid (any more).
| Identifer | oai:union.ndltd.org:nusl.cz/oai:invenio.nusl.cz:77048 |
| Date | January 2004 |
| Creators | Bolcha, Peter |
| Contributors | Schwarz, Jiří, Zemplinerová, Alena, Krajč, Marian |
| Publisher | Vysoká škola ekonomická v Praze |
| Source Sets | Czech ETDs |
| Language | Slovak |
| Detected Language | English |
| Type | info:eu-repo/semantics/doctoralThesis |
| Rights | info:eu-repo/semantics/restrictedAccess |
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