Methods applied in evaluating business subsidy programs: A survey

This paper surveys evaluation studies of business subsidy programs conducted in Finland and abroad. The aim is to assess the evaluation methods applied and then recommend the most appropriate ones applicable in Finland. In the paper twenty seven studies are analysed; eighteen using Finnish data and the rest, data from other countries. In the study, evaluation methods are divided into two types: ones which gather data and others which analyse them. We found that the evaluation methods utilised are associated with the results produced. Interestingly, also the commissioner of the evaluations seems to play a role in the results reported. The study recommends among others, that estimations on the impacts of business subsidy programs should not be based on primary data (from interviews or questionnaires of recipient firms) but rather on secondary data (from financial statements of firms). In addition, ex post evaluations, utilising both descriptive and econometric methods of analysis, should be the main focus of evaluation activities in the ministries and agencies distributing these business subsidies.