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R&D Incentives: The Effectiveness Of A Place-Based Policy

  • Marco Corsino
  • Roberto Gabriele
  • Anna Giunta

The empirical evidence concerning the impact of R&D subsidies on both sides of the innovation process (input and output) and the overall performance of the firm is mixed. Moreover, while the role of regions in implementing innovation policies has increased since the last decade, little is known on the effectiveness of regional policy. This paper analyzes the effectiveness of a local R&D policy implemented in the Italian province of Trento, during the period 2002-07. The econometric analysis is based on counterfactual models. We evaluate the achievements of the local policy maker with respect to the following objectives: (i) prompt additional investment in innovation; (ii) enhance the overall competitiveness of the business sector in the regional area. We find that R&D incentives positively affect investments in intangible assets and human capital, while they have no effect on firms’ turnover, labor productivity and profitability.

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Paper provided by Department of Economics - University Roma Tre in its series Departmental Working Papers of Economics - University 'Roma Tre' with number 0169.

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Length: 34
Date of creation: Nov 2012
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Handle: RePEc:rtr:wpaper:0169
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