Abstract:

Given the heterogeneous nature of firms that to a large extent differentiates their economic performance, it was expected that it might also be important in terms of the effectiveness of interventions undertaken towards them within special economic zones. The paper aims to determine whether and to what extent the industry can influence the varying employment effects in firms benefiting from state aid in SEZs in Poland. The study uses a counterfactual approach using propensity score matching (PSM) and a kernel-based estimator, combined with the difference-in-difference method, to estimate the net employment effects of the SEZ programme at the firm level. The results suggest that industry, as one dimension of the heterogeneity of economic agents, can have an important impact on the differential effectiveness of public support. Tailoring support to the specific needs and potential of different industries would allow for a more efficient use of available resources, resulting in more jobs, stimulating innovation and improving productivity.