Investment Subsidies Effectiveness: Evidence from a Regional Program

Simone Chinetti

Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, 2023, vol. 9, issue 2, No 12, 723-759

Abstract: Abstract I provide novel empirical evidence on the effectiveness of public funding in lagging behind areas by investigating the effect of a subsidy program implemented in the Campania region (South Italy) and targeting SMEs. By relying on a Difference-in-Differences approach, my estimates demonstrate that the regional program produces a sizable increase in private firms’ innovative investment spending. However, I show also large heterogeneity in the firms’ response. In particular, I find that the positive effect on investment, compatible with the input-additionality hypothesis, comes from medium-large firms and low-tech medium-large enterprises. Finally, I show that the program has considerable indirect effects on medium-large low tech service firms’ labour demand but not on overall firms’ productivity.

Keywords: Innovative investments; Public subisidies; SMEs; Regional policy (search for similar items in EconPapers)
JEL-codes: H25 L52 O31 O38 R58 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s40797-022-00196-1 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:italej:v:9:y:2023:i:2:d:10.1007_s40797-022-00196-1

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/40797

DOI: 10.1007/s40797-022-00196-1

Access Statistics for this article

Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti is currently edited by Roberto Cellini

More articles in Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti from Springer, Società Italiana degli Economisti (Italian Economic Association) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().