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Funding Innovation at Regional Level: An Analysis of a Public Policy Intervention in the Piedmont Region

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  • Giusy Cannone
  • Elisa Ughetto

Abstract

Cannone G. and Ughetto E. Funding innovation at regional level: an analysis of a public policy intervention in the Piedmont region, Regional Studies . The aim of this paper is to evaluate the attractiveness and efficiency of the public financing programme DOCUP 2000-2006 ( Documento Unico di Programmazione ) in the Piedmont region of Italy. The dataset consists of 1235 firms that applied for public funding to Finpiemonte S.p.A. First, the determinants that lead firms to apply for public funding are examined. It is found that leveraged firms are more likely to ask for public subsidies. What drives Finpiemonte in selecting the firms to be subsidized is then analysed. Results for Measure 2.1b point to lower levels of firm leverage, lower costs and a higher life cycle of the projects to be financed. If the grant scheme under Measure 2.6b is considered, the selection process seems to be influenced by firm profitability. Finally, the efficacy of the programme on firm performance in the years following the granting of the subsidy is estimated. It is found that subsidized firms show an increase of indebtedness and of total fixed assets, while there is no evidence of any impact on firm profitability.

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  • Giusy Cannone & Elisa Ughetto, 2014. "Funding Innovation at Regional Level: An Analysis of a Public Policy Intervention in the Piedmont Region," Regional Studies, Taylor & Francis Journals, vol. 48(2), pages 270-283, February.
    • Handle: RePEc:taf:regstd:v:48:y:2014:i:2:p:270-283
    DOI: 10.1080/00343404.2011.653338
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    2. Andrea Bellucci & Luca Pennacchio & Alberto Zazzaro, 2019. "Public R&D subsidies: collaborative versus individual place-based programs for SMEs," Small Business Economics, Springer, vol. 52(1), pages 213-240, January.
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    4. Rodrigo Martín-García & Jorge Morán Santor, 2021. "Public guarantees: a countercyclical instrument for SME growth. Evidence from the Spanish Region of Madrid," Small Business Economics, Springer, vol. 56(1), pages 427-449, January.
    5. Inha Oh & Seogwon Hwang, 2024. "Assessing the Effect of the Size of R&D Subsidies on the Economic Performance of SMEs: Comparison of Manufacturing and Service Firms in Korea," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(1), pages 518-546, March.
    6. Andrea Bellucci & Luca Pennacchio & Alberto Zazzaro, 2019. "R&D Subsidies and Firms’ Debt Financing," CSEF Working Papers 527, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    7. DaEun Kim & Sungchan Yeom & Myeong Chul Ko, 2020. "The Interactive Effect of Government Financial Support and Firms’ Innovative Efforts on Company Growth: A Focus on Climate-Tech SMEs in Korea," Sustainability, MDPI, vol. 12(22), pages 1-12, November.
    8. Andrea Bellucci & Luca Pennacchio & Alberto Zazzaro, 2016. "Public subsidies for SME research and development: Empirical evaluation of collaborative versus individual place-based programs," Mo.Fi.R. Working Papers 133, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
    9. Bellucci, Andrea & Pennacchio, Luca & Zazzaro, Alberto, 2023. "Debt financing of SMEs: The certification role of R&D Subsidies," International Review of Financial Analysis, Elsevier, vol. 90(C).
    10. Yang, Bofei & Zhu, Shengjun, 2022. "Public funds in high-tech industries: A blessing or a curse," Socio-Economic Planning Sciences, Elsevier, vol. 83(C).
    11. Takano, Keisuke & Okamuro, Hiroyuki, 2020. "Place-based SME finance policy and local industrial revivals: An empirical analysis of a directed credit program after WW2," TDB-CAREE Discussion Paper Series E-2020-01, Teikoku Databank Center for Advanced Empirical Research on Enterprise and Economy, Graduate School of Economics, Hitotsubashi University.

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