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Evaluating the impact of innovation incentives: evidence from an unexpected shortage of funds

Author

Listed:
  • Guido de Blasio
  • Davide Fantino
  • Guido Pellegrini

Abstract

To evaluate the effect of an R&D subsidy, one needs to know what the subsidized firms would have done without the incentive. This article studies an Italian program of subsidies for the applied development of innovations, exploiting a discontinuity in program financing due to an unexpected shortage of public money. To identify the effect of the program, the study implements a regression discontinuity design and compares firms that applied before and after the shortage occurred. The results indicate that the program was not effective in stimulating innovative investment.

Suggested Citation

  • Guido de Blasio & Davide Fantino & Guido Pellegrini, 2015. "Evaluating the impact of innovation incentives: evidence from an unexpected shortage of funds," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 24(6), pages 1285-1314.
    • Handle: RePEc:oup:indcch:v:24:y:2015:i:6:p:1285-1314.
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    File URL: http://hdl.handle.net/10.1093/icc/dtu027
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    1. Marco Taboga, 2011. "Under‐/Over‐Valuation of the Stock Market and Cyclically Adjusted Earnings," International Finance, Wiley Blackwell, vol. 14(1), pages 135-164, April.
    2. Matteo Bugamelli & Fabiano Schivardi & Roberta Zizza, 2010. "The Euro and Firm Restructuring," NBER Chapters, in: Europe and the Euro, pages 99-138, National Bureau of Economic Research, Inc.
    3. Magri, Silvia & Pico, Raffaella, 2011. "The rise of risk-based pricing of mortgage interest rates in Italy," Journal of Banking & Finance, Elsevier, vol. 35(5), pages 1277-1290, May.
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    More about this item

    JEL classification:

    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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