Do subsidies to private capital boost firms' growth? A multiple regression discontinuity design approach

• 成果类型: Article
• 署名作者: Cerqua, Augusto; Pellegrini, Guido
• 署名单位: Sapienza University Rome
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2013.11.005
• 发表日期: 2014
• 页码: 114-126
• 关键词: Multiple rankings regression discontinuity design; Policy Evaluation; public subsidies; regional policy

摘要

There is still little consensus among economists on the effectiveness of business support policies. The evaluation of such policies requires a reliable identification procedure that is hardly achieved in empirical studies. We analyse the impact of a policy instrument - Law 488/92 (L488), the main Italian regional policy - that allocates subsidies to private firms by a multiple ranking system. Thanks to the peculiar L488 selection process that creates the conditions for a local random experiment, we are able to assess the effectiveness of these types of incentives for a relevant subgroup of firms. We propose a nonparametric multiple rankings regression discontinuity design that exploits the sharp discontinuities in the L488 rankings and extends the regression discontinuity design (RDD) approach to a context where the treatment is assigned by multiple rankings with different cut-off points. We find that the impact of the subsidies on employment, investment, and turnover is positive and statistically significant, while the effect on productivity is mostly negligible. The new subsidised capital is additional but non-complementary with the owner-financed investment. The results are robust to different specifications and not due to intertemporal substitution. (C) 2013 Elsevier B.V. All rights reserved.