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Assessing the effect of the amount of financial aids to Piedmont firms using the generalized propensity score

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  • Michela Bia
  • Alessandra Mattei

Abstract

Regional and national development policies play an important role to support local enterprises in Italy. The amount of financial aid may be a key feature for firms’ employment policies. We study the impact on employment of the amount of financial aid attributed to enterprises located in Piedmont, a region in northern Italy, analysing small-sized firms and medium- or large-sized firms separately. We apply generalized propensity score methods under the unconfoundedness assumption that adjusting for differences in a set of observed pre-treatment variables removes all biases in comparisons by different amounts of financial aid. We find that the estimated effects are increasing with amount of financial aid for both small-sized and medium- or large-sized firms, whereas the marginal effects of additional incentives are decreasing with amount of financial aid for small-sized firms, and have an inverse J-shape for medium- or large-sized firms. Copyright Springer-Verlag 2012

Suggested Citation

  • Michela Bia & Alessandra Mattei, 2012. "Assessing the effect of the amount of financial aids to Piedmont firms using the generalized propensity score," Statistical Methods & Applications, Springer;Società Italiana di Statistica, vol. 21(4), pages 485-516, November.
    • Handle: RePEc:spr:stmapp:v:21:y:2012:i:4:p:485-516
    DOI: 10.1007/s10260-012-0193-4
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