Publication: The Additionality Impact of a Matching Grant Program for Small Firms: Experimental Evidence from Yemen
Date
2016-02-05
ISSN
Published
2016-02-05
Author(s)
Abstract
Matching grants are one of the most
common types of private sector development programs used in
developing countries. But government subsidies to private
firms can be controversial. A key question is that of
additionality: do these programs get firms to undertake
innovative activities that they would not otherwise do, or
merely subsidize activities that will take place anyway?
Randomized controlled trials can provide the counterfactual
needed to answer this question, but efforts to experiment
with matching grant programs have often failed. This paper
uses a randomized controlled trial of a matching grant
program for firms in the Republic of Yemen to demonstrate
the feasibility of conducting experiments with well-designed
programs, and to measure the additionality impact. In the
first year, the matching grant is found to have led to more
product innovation, firms upgrading their accounting
systems, marketing more, making more capital investments,
and being more likely to report their sales grew.
Citation
“McKenzie, David; Assaf, Nabila; Cusolito, Ana Paula. 2016. The Additionality Impact of a Matching Grant Program for Small Firms : Experimental Evidence from Yemen. © World Bank, Washington, DC. http://openknowledge.worldbank.org/handle/10986/23755?show=full License: CC BY 3.0 IGO.”