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The Impact of Digitalization Policies. Evidence from Italy�s Hyper-depreciation of Industry 4.0 Investments

Author

Listed:
  • Barbara Bratta

    (Ministry of Economy and Finance of Italy)

  • Livio Romano

    (Confindustria)

  • Paolo Acciari

    (Ministry of Economy and Finance of Italy)

  • Francesca Mazzolari

    (Confindustria)

Abstract

This paper investigates the role played by hyper-depreciation of tangible assets, a fiscal incentive introduced for the first time by the Italian Government in 2017, in sustaining private investments in advanced digital technologies, and, indirectly, in affecting firms� labor demand. By making use of a unique firm-level dataset that links administrative records on tax returns and job flows with information from company balance-sheets, the paper addresses the following questions: what was the take-up of the fiscal incentive in its first year of implementation? What are the characteristics of recipient firms? What is the impact of subsidized investments on firms� hirings and separations? Overall, the results of the analysis suggest that hyper-depreciation has been so far an effective means to support the digital technology trasformation of the Italian production system and that such transformation has had a positive net effect

Suggested Citation

  • Barbara Bratta & Livio Romano & Paolo Acciari & Francesca Mazzolari, 2020. "The Impact of Digitalization Policies. Evidence from Italy�s Hyper-depreciation of Industry 4.0 Investments," Working Papers wp2020-6, Ministry of Economy and Finance, Department of Finance.
    • Handle: RePEc:ahg:wpaper:wp2020-6
    as

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    References listed on IDEAS

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    More about this item

    Keywords

    digitalization; innovation policy; labor demand; skills;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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