Counterfactual Impact Evaluation of the Support under Measure “Procesas LT” in Enterprises of the Construction Sector

Abstract

Competitiveness of the State and social welfare are closely related to the value added created and effective use of factors of production. Organisations that have achieved higher level of labour productivity are more competitive and beneficial for the State and society. Modern management methods have positive impact on labour productivity, therefore their application is encouraged. One of the promotion measures is “Procesas LT”, under which business organisations are granted non-refundable subsidies for implementation of modern management methods to increase labour productivity. Effectiveness of this measure is evaluated according to the established achievement indicators thereof, which depend not only on the support funds but also on other aspects, such as the macroeconomic factors. It has been determined that the counterfactual impact evaluation of this measure can be carried out in the enterprises that have been granted the support. The counterfactual impact evaluation of measure “Procesas LT” has been conducted in enterprises of the construction sector that have implemented the Occupational Health and Safety Management System in accordance with the requirements of standard OHSAS 18001. In order to gain the support enterprises undertake to implement the management method and increase labour productivity. The counterfactual evaluation conducted on the basis of sampling of eight enterprises has shown the following: three enterprises had undertaken extremely conservative obligations (considering the implemented management method, increase in labour productivity should be higher than the obligations, alone due to the macroeconomic factors affecting the sector); three other enterprises had undertaken rather conservative obligations (considering the implemented management method, increase in labour productivity should be comparable to the obligations, alone due to the macroeconomic factors affecting the sector); and only two enterprises had undertaken ambitious obligations to increase labour productivity (considering the implemented management method, increase in labour productivity should be much lower than the obligations, alone due to the macroeconomic factors affecting the sector). If the enterprises fulfil the obligations that they have undertaken, one Euro of the support funds under measure “Procesas LT” will enable creation of the surplus value added amounting to 9.3 Euros per year, due to additional increase in labour productivity that is not related to the macroeconomic factors.

The authors of the research acknowledge Public Institution Lithuanian Business Support Agency for cooperation.

DOI: http://dx.doi.org/10.5755/j01.ee.28.4.13718