Industrial policy in great Britain and its effect on total factor productivity in manufacturing plants, 1990-1998

Industrial policy in any economy has a number of varying and occasionally conflicting objectives, but the overarching intention of the various grants, subsidies and support schemes, arguably, must be to improve the economic performance of the plants they assist directly. However, in the absence of counterfactual evidence, whether or not assistance does improve performance is hard to establish. In this paper, we consider the impact of two UK government industrial support schemes (Regional Selective Assistance and the Small Firm Merit A wards for Research and Technology) on UK manufacturing plant level total factor productivity in an attempt to answer the question, 'did assistance make a difference?. © Scottish Economic Society 2004.