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Assessing the economic impact of public industrial policies: an empirical investigation on subsidies

Author

Listed:
  • Roberto Gabriele
  • Marco Zamarian

    (DISA, Faculty of Economics, Trento University)

  • Enrico Zaninotto

    (DISA, Faculty of Economics, Trento University)

Abstract

Empirical literature findings do not provide a clear-cut interpretation of the effects of public aid on firms’ performances. We contribute to this literature analysing the effects of public regional subsidies on investment using a new dataset covering all the firms in the Italian province of Trento, along with a record of public aid granted in the last 15 years. We find permanent positive effects of aid on firms’ size, but no effect is found on factor substitution, nor on technical change. Moreover, subsidies do not improve either profitability or productivity. These results help better define the scope for local aid.

Suggested Citation

  • Roberto Gabriele & Marco Zamarian & Enrico Zaninotto, 2006. "Assessing the economic impact of public industrial policies: an empirical investigation on subsidies," ROCK Working Papers 039, Department of Computer and Management Sciences, University of Trento, Italy, revised 12 Jun 2008.
    • Handle: RePEc:trt:rockwp:039
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    References listed on IDEAS

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    Cited by:

    1. Martina Cioni & Davide Conforti, 2007. "The effectiveness of regional policies for innovation: an empirical investigation," Department of Economics University of Siena 508, Department of Economics, University of Siena.
    2. Néstor Duch & Daniel Montolio & Mauro Mediavilla, 2007. "Evaluating the impact of public subsidies on a firm's performance: A quasi-experimental approach," Working Papers XREAP2007-07, Xarxa de Referència en Economia Aplicada (XREAP), revised Jul 2007.
    3. Nestor Duch Brown & Daniel Montolio Estivill & Mauro Mediavilla, 2007. "Evaluating the Impact of Public Subsidies on a Firms Performance: a Quasi-experimental Approach," Working Papers in Economics 181, Universitat de Barcelona. Espai de Recerca en Economia.
    4. Gosk Beata & Nehrebecka Natalia, 2019. "Are subsidies for Polish enterprises effective: empirical results based on panel data," Central European Economic Journal, Sciendo, vol. 6(53), pages 108-131, January.
    5. Jonathan Barr & Emma Clarence & Francesca Froy & Sergio Destefanis & Chris Warhurst, 2012. "Local Job Creation: How Employment and Training Agencies Can Help - The Labour Agency of the Autonomous Province of Trento, Italy," OECD Local Economic and Employment Development (LEED) Papers 2012/17, OECD Publishing.
    6. Spyros Arvanitis, 2013. "Micro-econometric approaches to the evaluation of technology-oriented public programmes: a non-technical review of the state of the art," Chapters, in: Albert N. Link & Nicholas S. Vonortas (ed.), Handbook on the Theory and Practice of Program Evaluation, chapter 3, pages 56-88, Edward Elgar Publishing.
    7. Berumen, Sergio A., 2012. "Evaluación del impacto de la política de incentivos sectoriales en el desarrollo de los municipios mineros de Castilla y León," Journal of Economics, Finance and Administrative Science, Universidad ESAN, vol. 17(33), pages 15-30.

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    More about this item

    Keywords

    regional policy; public subsidies; propensity score matching;
    All these keywords.

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models

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