How are growth and productivity in private firms affected by public subsidy? Evidence from a regional policy
The paper provides a statistically robust evaluation of the impact of state aid on capital accumulation in subsidized firms. The analysis considers subsidies allocated to the southern Italian regions over the period 1996-2004 under the regional policy, Law 488/1992. We apply an MDID estimator, taking selection on observables and non observables into account. Results evidence a higher growth in output, employment and fixed assets in subsidized firms but a lesser increase in Total Factor Productivity than in unsubsidized firms. The negative impact on long term productivity and growth reduces the positive temporary effects of regional subsidies.
Year of publication: |
2011
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Authors: | Bernini, Cristina ; Pellegrini, Guido |
Published in: |
Regional Science and Urban Economics. - Elsevier, ISSN 0166-0462. - Vol. 41.2011, 3, p. 253-265
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Publisher: |
Elsevier |
Keywords: | Public subsidies Policy evaluation Regional policy MDID estimator |
Saved in:
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