The results presented in the previous section suggest that participation in the South Australian IIFs had a positive additional impact on aspects of firm performance. This summary of the findings is however presented with the caveat that the current pattern of results may be influenced by the limitations of the data outlined in the previous section.
In terms of the additional benefits the current statistical evidence is the strongest for employment (FTE), followed by turnover, and weak for capital expenditure. Since employment generation was a key consideration of the South Australian IIFs, the finding that participant firms created additional employment opportunities, is encouraging. Participant firms also generated additional turnover — since profit can be considered as a function of turnover, the implication is that participant firms were more economically vibrant relative to the counterfactual — although this statement is predicated on the assumption that the participant firms had similar cost structures to counterfactual firms.
Participation in South Australian Innovation and Investment Funds: Impact on firm performance 25
The current research is exploratory and only considers one specific aspect, namely impacts from participation in the IIFs on firms. This is admittedly a narrow approach and ignores the potential broader impact of the IIFs on regional economies. Future modelling and assessment of these secondary spill-overs effects, and a consideration of the magnitude of type I and type II multiplier effects24 is likely to supplement the current research findings and make any future inferences about the impacts of the South Australian IIFs more definitive. Improvements in programme data collection for any subsequent programmes, for example via the use of standardised smart-forms would also assist in making any future research on IIF impacts more definitive.
It should be recognised that beyond any tangible benefits arising from the IIFs, there are bound to be intangible benefits that are of economic and social value, but are difficult to recognise and quantify. Notably, government targeted interventions to rapid structural change in the form of the IIFs is likely to have demonstration effects.
The current research should be seen as a proof of concept in terms of what is currently possible with BLADE in terms of firm-level analysis. Rather than a definitive assessment, it should be seen as a stepping stone for further research. Intuitively, as the next stage, an analysis of the secondary impacts of the IIFs on regional economies should be considered.
This research set out to assess the impact of participation in the South Australian Innovation and Investment Funds (IIFs) on firm performance. This had previously not been possible given limitations in programme data. This limitation is overcome by linking DIIS programme data to BLADE, resulting in a longitudinal dataset that allowed researchers to establish a counterfactual.
Via the use of a matching estimator this research determines that the South Australian IIFs had a positive additional impact on aspects of firm performance.
In terms of the additional benefits the statistical evidence is the strongest for employment (FTE), followed by turnover, and weak for capital expenditure.
Ultimately, this research should be treated as exploratory and a showcase of what is currently possible with BLADE.
24 In input-output analysis, a type I multiplier measures the direct and indirect effects as a result of changes in final and intermediate demand. Type II multipliers also include the induced effect, resulting from a change in employee compensation and income.
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