Are the Subsidies to Private Capital Useful? A Multiple Regression Discontinuity Design Approach
Sapienza University of Rome Economics Working Paper No. 12
45 Pages Posted: 31 May 2013
Date Written: April 19, 2011
There is still little consensus on the effectiveness of business support policies. The empirical evaluation is complicated by the difficulty in achieving reliable identification. We analyse the impact of Law 488/92, the main Italian regional policy. We propose a new approach, named multiple regression discontinuity design that exploits the sharp discontinuities in the L488 rankings and extends the RDD approach to a context where the treatment is assigned by multiple rankings with different cut-off points. We find that the impact of L488 on investment and production of the financed firms is positive and statistically significant.
Keywords: multiple regression discontinuity design, policy evaluation, public subsidies, regional policy
JEL Classification: R38, C14, H71
Suggested Citation: Suggested Citation