IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

Counterfactual Impact Evaluation of Enterprise Support Programmes. Evidence from a Decade of Subsidies to Italian Firm

Listed author(s):
  • Federico Biagi

    ()

  • Daniele Bondonio

    ()

  • Alberto Martini

The purpose of this paper is to offer empirical evidence on the impact generated by investment subsidies awarded to industrial firms on employment, sales, investments and labor productivity. The analysis is based on unique firm-level administrative data provided by the Italian National Statistical Agency on the universe of both treated- and non-treated applicant firms. For employment and sales outcomes such data derive directly from the National Social Security Agency of Italy and from the Internal Revenue Service Agency. The paper focuses on a decade (2000-2009) of subsidies awarded by a large-scale national Italian programme co-funded by the European Regional Development Fund and by the universe of smaller regional programmes available to all SMEs in the Northwestern Italian region (Piedmont). The analysis produces differential impacts based on different levels of the economic value of the incentives, different types of incentives (distinguishing between non-repayable grants, ?soft-loans? and ?interest rate grants?), different sizes and geographic location of the assisted firms. For the large scale national programme, the analysis exploit the existence of a natural experiment in the form of the existence of viable applicant firms that were denied the subsidy due to an exogenous, budget induced, cut-off point in the programme rankings of each wave of regional calls for applications. Impact estimates are then retrieved with a discontinuity designed within a difference in difference scheme that ensures exact matching of crucial firm characteristics. For the regional programmes, the analysis is implemented with a conditional difference in difference model that pre-processes the data based on a propensity score estimate to ensure common support between treated and non-treated firms. The results of our analysis show that: -Large non-repayable grants, particularly when given to large firms (and in underdeveloped regions), represent an ineffective way to stimulate additional private investment and to improve the performance of the subsidized firms; -Small grants given to small firms (not in the context of severely distressed socio-economic areas) have small impacts, but when all the dimensions are taken into account, they are more cost-effective; - Non-repayable grants are outperformed by repayable soft loans and interest rate subsidies as most effective tools for assistance; -For SMEs, soft-loans and interest rate grants are the most cost-effective form of support.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www-sre.wu.ac.at/ersa/ersaconfs/ersa15/e150825aFinal01619.pdf
Download Restriction: no

Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa15p1619.

as
in new window

Length:
Date of creation: Oct 2015
Handle: RePEc:wiw:wiwrsa:ersa15p1619
Contact details of provider: Postal:
Welthandelsplatz 1, 1020 Vienna, Austria

Web page: http://www.ersa.org

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as
in new window


  1. Bondonio, Daniele, 2009. "Impact identification strategies for evaluating business incentive programs," POLIS Working Papers 129, Institute of Public Policy and Public Choice - POLIS.
  2. Marco Caliendo & Sabine Kopeinig, 2008. "Some Practical Guidance For The Implementation Of Propensity Score Matching," Journal of Economic Surveys, Wiley Blackwell, vol. 22(1), pages 31-72, February.
  3. Battistin, Erich & Rettore, Enrico, 2008. "Ineligibles and eligible non-participants as a double comparison group in regression-discontinuity designs," Journal of Econometrics, Elsevier, vol. 142(2), pages 715-730, February.
  4. Cannari Luigi & D'Aurizio Leandro & de Blasio Guido, 2007. "The Effectiveness of Investment Subsidies: Evidence from Survey Data," Rivista italiana degli economisti, Società editrice il Mulino, issue 3, pages 329-346.
  5. 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.
  6. James J. Heckman & Hidehiko Ichimura & Petra Todd, 1998. "Matching As An Econometric Evaluation Estimator," Review of Economic Studies, Oxford University Press, vol. 65(2), pages 261-294.
  7. Bronzini, Raffaello & de Blasio, Guido, 2006. "Evaluating the impact of investment incentives: The case of Italy's Law 488/1992," Journal of Urban Economics, Elsevier, vol. 60(2), pages 327-349, September.
  8. Sascha O. Becker & Andrea Ichino, 2002. "Estimation of average treatment effects based on propensity scores," Stata Journal, StataCorp LP, vol. 2(4), pages 358-377, November.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:wiw:wiwrsa:ersa15p1619. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Gunther Maier)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.