Industrial policy evaluation in the presence of spillovers

Cerqua, A. and Pellegrini, G. 2017. Industrial policy evaluation in the presence of spillovers. Small Business Economics. 49 (3), pp. 671-686. doi:10.1007/s11187-017-9855-9

TitleIndustrial policy evaluation in the presence of spillovers
AuthorsCerqua, A. and Pellegrini, G.
Abstract

The shortage of studies on spatial spillovers of capital subsidy policies is rather surprising, considering that such policies are usually designed to generate spatial externalities. We propose a new framework that allows positive agglomeration effects to be contrasted with the negative cross-sectional substitution and the crowding-out effect. The global evaluation of the ATT and the spillover parameters shifts the spotlight from the policy effect on subsidised firms to the global effect of capital subsidy policies on the targeted territory. The empirical evaluation of a policy in Italy mainly directed towards small- and medium-sized firms shows that the impact on investments, turnover and employment is positive and large, but is negative on TFP. However, the employment growth is partially determined to the detriment of the untreated firms.

JournalSmall Business Economics
Journal citation49 (3), pp. 671-686
ISSN0921-898X
Year2017
PublisherSpringer
Publisher's versionart_10.1007_s11187-017-9855-9.pdf
Digital Object Identifier (DOI)doi:10.1007/s11187-017-9855-9
Publication dates
Published online12 Apr 2017
Published12 Apr 2017
Published in printOct 2017
LicenseCC BY 4.0

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