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

Author

Listed:
  • Guido de Blasio

    () (Bank of Italy)

  • Davide Fantino

    () (Bank of Italy)

  • Guido Pellegrini

    () (Universit� degli Studi di Roma "La Sapienza")

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 paper studies an Italian programme of subsidies for the applied development of innovations, exploiting a discontinuity in programme financing due to an unexpected shortage of public money. To identify the effect of the programme, the study implements a regression discontinuity design and compares firms that applied for funding before and after the shortage occurred. The results indicate that the programme was not effective in stimulating innovative investment.

Suggested Citation

  • Guido de Blasio & Davide Fantino & Guido Pellegrini, 2011. "Evaluating the impact of innovation incentives: evidence from an unexpected shortage of funds," Temi di discussione (Economic working papers) 792, Bank of Italy, Economic Research and International Relations Area.
  • Handle: RePEc:bdi:wptemi:td_792_11
    as

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    References listed on IDEAS

    as
    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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    Citations

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    Cited by:

    1. Leandro D�Aurizio & Marco Marinucci, 2013. "Italian firms� innovation strategies in 2008-2010," Questioni di Economia e Finanza (Occasional Papers) 197, Bank of Italy, Economic Research and International Relations Area.
    2. repec:idb:idbbks:7705 is not listed on IDEAS
    3. Marusca De Castris & Guido Pellegrini, 2015. "Caratteristiche delle imprese ed eterogeneità degli effetti degli incentivi alla r&s," SCIENZE REGIONALI, FrancoAngeli Editore, vol. 2015(3 Suppl.), pages 61-79.
    4. Ivano D'Antonio & Alessandro De Iudicibus & Giuseppe Piroli & Francesco Savoia, 2014. "Ricerca e innovazione in campania: una valutazione controfattuale della politica di coesione," STUDI ECONOMICI, FrancoAngeli Editore, vol. 2014(113), pages 61-87.
    5. Michel Dumont, 2015. "Working Paper 05-15 - Evaluation of federal tax incentives for private R&D in Belgium: An update," Working Papers 1505, Federal Planning Bureau, Belgium.
    6. Elisa Barbieri & Roberto Iorio & Giuseppe Lubrano Lavadera, 2010. "Incentivi alla ricerca e sviluppo in Italia: una indagine sugli effetti della Legge 46/82," Working Papers 1003, c.MET-05 - Centro Interuniversitario di Economia Applicata alle Politiche per L'industria, lo Sviluppo locale e l'Internazionalizzazione.
    7. Carlos José Miranda Victório & Helder Gomes Costa & Cristina Gomes de Souza, 2016. "Modeling selection criteria of R&D projects for awarding direct subsidies to the private sector," Science and Public Policy, Oxford University Press, vol. 43(2), pages 275-287.
    8. Hottenrott, Hanna & Demeulemeester, Sarah, 2017. "R&D Subsidies and Firms’ Cost of Debt," Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168093, Verein für Socialpolitik / German Economic Association.
    9. Federico Biagi & Massimo Loi, 2011. "Do Innovation Incentives Work? Evidence From The Italian Manufacturing Sector," ERSA conference papers ersa11p681, European Regional Science Association.
    10. Francesco Aiello & Giuseppe Albanese & Paolo Piselli, 2017. "Public R&D Support In Italy. Evidence From A New Firm-Level Patent Data Set," Working Papers 201702, Università della Calabria, Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF.
    11. repec:eee:respol:v:46:y:2017:i:6:p:1142-1161 is not listed on IDEAS
    12. Brüggemann, Julia & Proeger, Till, 2017. "The effectiveness of public subsidies for private innovations: An experimental approach," Center for European, Governance and Economic Development Research Discussion Papers 266, University of Goettingen, Department of Economics.
    13. repec:pal:palcom:v:4:y:2018:i:1:d:10.1057_s41599-018-0069-9 is not listed on IDEAS
    14. Bronzini, Raffaello & Piselli, Paolo, 2016. "The impact of R&D subsidies on firm innovation," Research Policy, Elsevier, vol. 45(2), pages 442-457.
    15. repec:eee:respol:v:46:y:2017:i:10:p:1851-1862 is not listed on IDEAS
    16. Gabriel Casaburi & Gustavo Crespi & Ignacio L. De León & José Fernández & Lucas Figal Garone & Matteo Grazzi & Carlos Guaipatín & Jorge Katz & Juan J. Llisterri & Alessandro Maffioli & Juan Carlos Nav, 2016. "La política de innovación en América Latina y el Caribe: Nuevos caminos," IDB Publications (Books), Inter-American Development Bank, number 94816 edited by Juan Carlos Navarro & Jocelyn Olivari, February.
    17. repec:eee:iepoli:v:39:y:2017:i:c:p:72-83 is not listed on IDEAS
    18. Brueggemann, Julia & Meub, Lukas, 2015. "Experimental evidence on the effects of innovation contests," Center for European, Governance and Economic Development Research Discussion Papers 251, University of Goettingen, Department of Economics.
    19. Giuseppe Attanasi & Kene Boun My & Marco Buso & Anne Stenger, 2016. "Private investment with social benefits under uncertainty: the dark side of public financing," Working Papers of BETA 2016-12, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.

    More about this item

    Keywords

    R&D; public policy; evaluation;

    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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