Fiml Estimation of a Bivariate Probit Selection Rule - an Application on Firm Growth and Subsidisation

23 Pages Posted: 30 Jan 2003

See all articles by Frank Reize

Frank Reize

Center for European Economic Research (ZEW)

Date Written: March 15, 2001

Abstract

This study applies a full information maximum likelihood (FIML) estimator of the sample selection model with bivariate selection rule for the investigation of the impact of subsidised firm foundation from unemployment on employment growth of the firm. The empirical analysis is based on the ZEW Firm Start-up Panel using a cohort of firms founded in 15 labour market districts during 1993 and 1995. Estimation results show that the use of the FIML estimator is clearly warranted, compared to a two-step estimator. The FIML model yields a significant negative impact of bridging allowance on employment growth, whereas the two-step estimator underestimates the impact.

JEL Classification: C35, D92, J68

Suggested Citation

Reize, Frank, Fiml Estimation of a Bivariate Probit Selection Rule - an Application on Firm Growth and Subsidisation (March 15, 2001). ZEW Discussion Paper No. 01-13, Available at SSRN: https://ssrn.com/abstract=336525 or http://dx.doi.org/10.2139/ssrn.336525

Frank Reize (Contact Author)

Center for European Economic Research (ZEW) ( email )

P.O. Box 10 34 43
L 7,1 D-68161 Mannheim
Germany

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
444
Abstract Views
2,536
rank
75,871
PlumX Metrics