Assessing the Economic Impact of Public Industrial Policies: An Empirical Investigation on Subsidies

32 Pages Posted: 23 Jan 2008

See all articles by Roberto Gabriele

Roberto Gabriele

University of Trento - Department of Economics and Management; Scuola Superiore Sant'Anna di Pisa - Laboratory of Economics and Management (LEM)

Marco Zamarian

University of Trento; Università degli Studi di Milano-Bicocca - Center for Interdisciplinary Studies in Economics, Psychology & Social Sciences (CISEPS)

Enrico Zaninotto

University of Trento - Department of Computer and Management Sciences (DISA)

Date Written: November 2006

Abstract

Empirical literature findings do not provide a clear-cut interpretation of the effects of public aid on firms performances. We contribute to this literature analysing the effects of public regional subsidies on investment using a new dataset covering all the firms in the Italian province of Trento, along with a record of public aid granted in the last 15 years. We find permanent positive effects of aid on firms' size, but no effect is found on factor substitution, nor on technical change. Moreover, subsidies do not improve either profitability or productivity. These results help better define the scope for local aid.

Keywords: Regional policy, public subsidies, propensity score matching

JEL Classification: R11, R58, C31

Suggested Citation

Gabriele, Roberto and Zamarian, Marco and Zaninotto, Enrico, Assessing the Economic Impact of Public Industrial Policies: An Empirical Investigation on Subsidies (November 2006). Available at SSRN: https://ssrn.com/abstract=1086375 or http://dx.doi.org/10.2139/ssrn.1086375

Roberto Gabriele (Contact Author)

University of Trento - Department of Economics and Management ( email )

Via Inama, 5
I-38122 Trento
Italy
+39-0461-282109 (Phone)
+39-0461-282124 (Fax)

Scuola Superiore Sant'Anna di Pisa - Laboratory of Economics and Management (LEM) ( email )

Piazza Martiri della Liberta, 33
Pisa, I-56127
Italy

Marco Zamarian

University of Trento ( email )

Via Giuseppe Verdi 26
Trento, Trento 38152
Italy

Università degli Studi di Milano-Bicocca - Center for Interdisciplinary Studies in Economics, Psychology & Social Sciences (CISEPS) ( email )

Piazza dell'Ateneo Nuovo, 1
Milano, 20126
Italy

Enrico Zaninotto

University of Trento - Department of Computer and Management Sciences (DISA) ( email )

Via Inama, 5
I-38100 Trento
Italy

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