The authors model the channels through which public expenditure on infrastructure influences firm value and shapes its investment decisions via both adjustment costs and marginal profitability of capital. The authors test these hypotheses using a large panel of Italian firms. Empirical results...

This paper assesses the impact of Research and Development (R&D) efforts on production in the North and Centre-South of Italy by using a panel of 1,203 manufacturing firms over the period 1998–2003. The estimations are based on a nonlinear translog production function augmented by a measure of...