Evaluating the social mechanism of investment subsidies using an abductive approach

Investment subsidies are the most popular means of public support for enterprises. However, evaluation studies measuring their net effect suggest that their effectiveness is highly debatable. The social mechanism of investment subsidies has been investigated in the article with a flexible, abductive methodological approach. Both methodological and data source triangulations have been applied: qualitative and quantitative methods deployed; and viewpoints of manifold groups (policy-makers, beneficiaries, journalists) reconstructed. The article goes beyond previous findings indicating the small net effects of intervention by investigating the social mechanism accounting for the size of the effects. It also indicates that the permanency of the programme may be explained by the analysis of the programme theories of stakeholders involved in implementation.