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The possible adverse impact of innovation subsidies: some evidence from a bivariate switching model

Alessandra Catozzella and Marco Vivarelli ()

Economics Bulletin, 2012, vol. 32, issue 1, 648-661

Abstract: The impact of public funding is estimated using firm-level Italian data. Results from a bivariate endogenous switching model show that innovative productivity is negatively affected by the innovation subsidy; far from ‘doing better' as a result of government intervention, supported firms appear to exhaust their advantage through merely increasing their innovative expenditures.

Keywords: innovation subsidy; policy evaluation; product innovation; bivariate endogenous switching model (search for similar items in EconPapers)
JEL-codes: O3 (search for similar items in EconPapers)
Date: 2012-02-16
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