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Are the subsidies to private capital useful? A Multiple Regression Discontinuity Design Approach1

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  • Guido Pellegrini
  • Augusto Cerqua

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Abstract

There is still little consensus on the effectiveness of business support policies. The empirical evaluation is complicated by the difficulty in achieving reliable identification. We analyse the impact of Law 488/92, the main Italian regional policy. We propose a new approach, named multiple regression discontinuity design that exploits the sharp discontinuities in the L488 rankings and extends the RDD approach to a context where the treatment is assigned by multiple rankings with different cut-off points. We find that the impact of L488 on investment and production of the financed firms is positive and statistically significant.

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  • Guido Pellegrini & Augusto Cerqua, 2011. "Are the subsidies to private capital useful? A Multiple Regression Discontinuity Design Approach1," ERSA conference papers ersa11p1323, European Regional Science Association.
  • Handle: RePEc:wiw:wiwrsa:ersa11p1323
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    References listed on IDEAS

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    1. Criscuolo, Chiara & Martin, Ralf & Overman, Henry & Van Reenen, John, 2012. "The Causal Effects of an Industrial Policy," IZA Discussion Papers 6323, Institute for the Study of Labor (IZA).
    2. Bernini, Cristina & Pellegrini, Guido, 2011. "How are growth and productivity in private firms affected by public subsidy? Evidence from a regional policy," Regional Science and Urban Economics, Elsevier, vol. 41(3), pages 253-265, May.
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    13. Valentina Adorno & Cristina Bernini & Guido Pellegrini, 2007. "The Impact of Capital Subsidies: New Estimations under Continuous Treatment," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, pages 67-92.
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    Cited by:

    1. Federico Biagi & Daniele Bondonio & Alberto Martini, 2015. "Counterfactual Impact Evaluation of Enterprise Support Programmes. Evidence from a Decade of Subsidies to Italian Firm," ERSA conference papers ersa15p1619, European Regional Science Association.
    2. Annamaria Nifo & Gaetano Vecchione, 2015. "A quali imprese vanno i sussidi pubblici? evidenza dall’industria manifatturiera italiana," RIVISTA DI ECONOMIA E STATISTICA DEL TERRITORIO, FrancoAngeli Editore, vol. 2015(3), pages 5-28.

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