Public subsidies, TFP and Efficiency: A tale of complex relationships

Bernini, C., Cerqua, A. and Pellegrini, G. 2017. Public subsidies, TFP and Efficiency: A tale of complex relationships. Research Policy. 46 (4), pp. 751-767. doi:10.1016/j.respol.2017.02.001

TitlePublic subsidies, TFP and Efficiency: A tale of complex relationships
AuthorsBernini, C., Cerqua, A. and Pellegrini, G.
Abstract

This paper evaluates the impact of subsidies on the different components of TFP for granted firms’ long-term growth. The impact of capital subsidies is captured by a quasi–experimental method (Multiple RDD), exploiting the conditions for a local random experiment created by an Italian industrial policy. Results show that capital subsidies negatively affect TFP growth in the short term, and signals of positive effects appear only after 3-4 years. This positive medium-long term impact comes especially through technological change and not through scale impact change, as may have been expected.

KeywordsPolicy evaluation, Public subsidies, TFP decomposition, Stochastic frontier model, Regression discontinuity design
JournalResearch Policy
Journal citation46 (4), pp. 751-767
ISSN0048-7333
Year2017
PublisherElsevier
Accepted author manuscriptManuscript_authors_R2_AC-1.pdf
Digital Object Identifier (DOI)doi:10.1016/j.respol.2017.02.001
Publication dates
Published online21 Feb 2017
Published21 Feb 2017
LicenseCC BY-NC-ND 4.0

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