The demand side of Industrial Policies: Evidence and Methodology for Italian firms

From the second post-war, a significant amount of resources have been used to support Italian industrial policy. Several studies has been developed in order to evaluate these types of interventions, but less efforts have been devoted to understand what were the real needs of Italian firms. The main aim of this paper is to analyze the demand of public subsides describing the experience of the Italian firms with regard to a complex structure of public interventions actually supplied by both central and local government. This type of demand is related to both the financial benefits led by the public grants and the firms’ needs produced by the potential new investments. A deep understanding of these mechanisms could improve the efficiency of the public sector policy design favouring the development of coherent and adequate program of grants with respect to the complex scenario in which Italian firms operate. Qualitative information and data were gathered trough interviews with managers of about 5400 firms. Logit techniques are developed in order to describe and quantify this demand. The main results are: firstly, it is difficult to outline a general demand framework in which all firms can be collocate independently by their specific characteristics: secondly, a significance and well-clear demand seems to stand out form those firms which represent the more innovative and dynamic sectors of the Italian economic system; finally, a more general and traditional view of the industrial policy related to the development of physic infrastructures is not such appreciated by the firms, mainly because of a lack of trust on the effective efficiency of these types of interventions.