Limitation for Measuring the Effect of Public Assistance Programs on a Country-Level Economy

Are there benefits in trying to measure public assistance effect at the country-level economy? Literature suggest two main approaches, Wood (1994) ; Blizzard (1995) ; Wood (1999) claims that an economic approach which represent each change as a result of macro economic status is the one with the upper hand. Chrisman (1995) ; Chrisman and Mcmullan (1996) ; Chrisman and Mcmullan (2002) represent an opposite approach, they claim that even though measurement has significant difficulties, it’s can be argued that improving the management level in a firm using assistance of outside help can lead to an improvement at the firm’s performance level. Such improvement at the firm level could suggest that changes will exist at country-level economy as well.

Analyzing the different ways scholars tried to cope with measuring the effect of public assistance programs on country-level economy, raise several questions regarding the possible accuracy that can be achieved based on the existing models:
1. There is objective difficulty in gathering data from public assistance programs that can be used for analysis at the country-level economy.
2. Measuring effects at country-level economy is based on measurement at the firm level. Using different models scholars “transform” data from firm level to country-level. The “transformation” process doesn’t take into account significant measures at country-level economy (e.g. GDP growth, Unemployment).
3. Luukkonen (1998) argue that the difficulties to assess the effect of public assistance programs comes from the problematicalness to “transform” the analyze data from the firm level to country-level.
4. Measures, like Sales growth and employment growth, which have been used to assess the effect of public assistance programs at country-level represent performance measurement which relate to “growth”. Other measures, such as, profitability, efficiency, liquidity, which relate to other dimensions of the overall performance structure, could in fact pull to other as well as opposite direction.
5. Sale growth and market share growth measures represent opposite directions. Sales growths that follow market share growth by a given firm suggest that the particular sale growth comes on the account of other firms in the industry, and it’s not represent genuine growth. Most scholars doesn’t coupe with this issue.