Click here to download

Do public subsidies go to the right firms? Evidence from Italian manufacturing industries
Journal Title: RIVISTA DI ECONOMIA E STATISTICA DEL TERRITORIO 
Author/s: Annamaria Nifo, Gaetano Vecchione 
Year:  2015 Issue: 3 Language: Italian 
Pages:  24 Pg. 5-28 FullText PDF:  151 KB
DOI:  10.3280/REST2015-003001
(DOI is like a bar code for intellectual property: to have more infomation:  clicca qui   and here 


The goal of this paper is to understand whether, firm’s subsidies in Italy are inspired by precise criteria for selecting projects, in an overall policy design aimed in pursuing the general objectives and affect the structural characteristics of Italian industry, or whether these interventions tend to conform to a general attitude of favor toward specific characteristics of enterprises in terms of size, capital intensity, geographical location.
Methods and Results
The empirical investigation, carried out on a sample of 4,230 Italian manufacturing firms, aims to compare ex-ante companies subsidized and unsubsidized, through comparative analysis of certain characteristics such as size, productive specialization, geographical location, trade openness, belonging to consortium, group or value chain, labor and capital productivity etc. In terms of methodology, the work implements a model of Propensity Score Matching (PSM), which allows to compare two subsets of companies. The PSM results are supported by further Probit estimates for a robustness check.
Conclusions
The results of the empirical survey show that the subsidized Italian company is relatively larger, more capitalized and more internationalized. Located mainly in the South, it is characterized by low productivity of capital, without significant advantages in terms of total factor productivity. The distribution of subsidies seems to tend to reproduce the existing structural setting of the national production system, without clear guidelines to support specific production sectors or segments of Italian industry more productive and innovative. Overall, the evidence supports therefore a limited capacity of public intervention to reward projects with major economic benefits, since the subsidies are in fact converge mainly to larger and more capitalized firms.
Keywords: Public subsidies, firms, manufacturing industry, screening rules, firms characteristics
Jel Code: H2, D22, D24

  1. Accetturo A., de Blasio G. (2008), Le politiche per lo sviluppo locale: la valutazione dei Patti territoriali. La valutazione degli aiuti alle imprese. Bologna: il Mulino.
  2. Bernard A.B., Jensen J.B. (1995), Exporters, Jobs and Wages in US manufacturing: 1976-1987, Brookings Papers on Economic Activity, Microeconomics, pp. 67-119.
  3. Bernini C., Pellegrini G. (2011), How are Growth and Productivity in Private Firms affected by Public Subsidy? Evidence from a Regional Policy, Regional Science and Urban Economics, 41 (3), pp. 253-265.
  4. Bianchi T., Masselli M., Pellegrini G. (2008), L’efficacia economico-sociale dei Contratti di Programma. I risultati di una ricerca valutativa, Rivista di Economia e Statistica del Territorio, 3, pp. 5-27.
  5. Blanes J.V., Busom I. (2004), Who participates in R&D Subsidy Programs? The Case of Spanish Manufacturing Firms, Research Policy, 33 (10), pp. 1459-1476.
  6. Blundell R., Costa Dias M. (2000), Evaluation Methods for Non-experimental Data, Fiscal Studies, 4, pp. 427-468.
  7. Bondonio D., Greenbaum R. (2007), Do Business Investment Incentives promote Employment in Declining Areas? Evidence from EU Objective 2 Regions, European Urban and Regional Studies, 13 (3), pp. 225-244.
  8. Bronzini R., Di Blasio G. (2006), Evaluating the Impact of Investment Incentives: The case of Italy’s Law 488/1992, Journal of Urban Economics, 60, pp. 327-349.
  9. Bronzini R., de Blasio G., Pellegrini G., Scognamiglio A. (2008), La valutazione del credito d’imposta per gli investimenti, Rivista di Politica Economica, 98 (4), pp. 79-112.
  10. Cannari L., D’Aurizio L., de Blasio G. (2007). The Effectiveness of Investment Subsidies: Evidence from Survey Data, Rivista italiana degli economisti, 3, pp. 329-346,, DOI: 10.1427/27701
  11. Carlucci C., Pellegrini G. (2003), Gli effetti della legge 488/92: una valutazione dell’impatto occupazionale sulle imprese agevolate, Rivista italiana degli economisti, 2, pp. 267-286.
  12. Carlucci C., Pellegrini G. (2005), Nonparametric Analysis of the Effects on Employment of Public Subsidies to Capital Accumulation: The Case of Law 488/92 in Italy, presented at the Congress AIEL 2004, Modena.
  13. Cerqua A., Pellegrini G. (2011), Are the Subsidies to Private Capital Useful? A Multiple Regression Discontinuity Design Approach, Working Papers 12, Doctoral School of Economics, Sapienza University of Rome.
  14. Criscuolo C., Martin R., Overman H., Van Reenen J. (2012), The Causal Effects of an Industrial Policy, NBER Working Papers 17842, National Bureau of Economic Research. Del Monte A., Scalera D. (2001), The Life Duration of Small Firms Born Within a Start-up Programme: Evidence from Italy, Regional Studies, Taylor & Francis Journals, 35 (1), pp. 11-21.
  15. Feldman M.P., Kelley M.R. (2006), The ex-ante Assessment of Knowledge Spillovers: Government R&D Policy, Economic Incentives and Private Firm Behavior, Research Policy, 35, pp. 1509-1521.
  16. Giebe T., Grebe T., Wolfstetter E. (2006), How to allocate R&D (and Other) Subsidies: An Experimentally Tested Policy Recommendation, Research Policy, 35, pp. 1261-1272.
  17. Giunta A., Mantuano M. (2010), Contratti di programma: evoluzione della normativa ed efficacia economica, Economia e Politica Industriale, 1, pp. 151-166.
  18. Heckman J.J. (1979), Dummy Endogenous Variables in a Simultaneous Equations System, Econometrica, 47, pp. 153-161.
  19. Heckman J.J., La Londe R., Smith, J. (1999), The Economics and Econometrics of Active Labor Market Programs, Handbook of Labor Economics, 3, pp. 1865-2097.
  20. Heckman J.J., Smith J. (2004), The Determinants of Participation in a Social Program: Evidence from a Prototypical Job Training Program, Journal of Labor Economics, 22(2), pp. 243-298.
  21. Lasagni A., Nifo A., Vecchione G. (2015), Firm Productivity and Institutional Quality: Evidence from Italian Industry, Journal of Regional Science, 55, 5, pp. 774-800.
  22. Lichtenberg F. (1999), The Allocation of Publicly-Funded Biomedical Research, The American Enterprise Institute Press, Washington, DC, NBER Working Paper 6601.
  23. Mudambi R. (1999), Multinational Investment Attraction: Principal-agent Considerations, International Journal of the Economics of Business, 6 (1), pp. 65-79.
  24. Rolfe R.J., Ricks D.A., Pointer M.M., McCarthy M. (1993), Determinants of FDI Incentive Preference of MNEs, Journal of International Business Study, 24(2), pp. 335-355.
  25. Rosenbaum P.R., Rubin D.B. (1983), The Central Role of the Propensity Score in Observational Studies for Causal Effects, Biometrika, 70 (1), pp. 41-55.
  26. Scalera D., Zazzaro A. (2000), Incentivi agli investimenti o rendite alle imprese? Una riflessione sulla procedura di allocazione dei sussidi previsti dalla legge n. 488 del 1992, Rivista di Politica Economica, 90 (5), pp. 69-100.
  27. Svensson P. (1998), Strategic Trade Policy and Endogenous R&D Subsidies: An Empirical Study, Kyklos, 51, pp. 259-275.

Annamaria Nifo, Gaetano Vecchione, Do public subsidies go to the right firms? Evidence from Italian manufacturing industries in "RIVISTA DI ECONOMIA E STATISTICA DEL TERRITORIO" 3/2015, pp. 5-28, DOI:10.3280/REST2015-003001

   

FrancoAngeli is a member of Publishers International Linking Association a not for profit orgasnization wich runs the CrossRef service, enabing links to and from online scholarly content