The effectiveness of investment subsidies: evidence from survey data
This paper investigates the effects of subsidies on the investment decisions of a sample of Italian manufacturing firms. We use survey information on firmsï¿½ subjective evaluations of the investment they would have undertaken without financing, finding that subsidies have limited effectiveness as a stimulus. Without subsidies, three-quarters of the firms financed would have made the same amount of investment at the same date; most of the remaining firms would have made the same amount of investment at a future date.
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