Template-Type: ReDIF-Paper 1.0
Author-Name: Alessandra Catozzella
Author-X-Name-First: Alessandra
Author-X-Name-Last: Catozzella
Author-Email: alessandra.catozzella@unicatt.it
Author-Workplace-Name: DISCE, Università Cattolica del Sacro Cuore
Author-Name: Marco Vivarelli
Author-X-Name-First: Marco
Author-X-Name-Last: Vivarelli
Author-Email: marco.vivarelli@unicatt.it
Author-Workplace-Name: DISCE, Università Cattolica del Sacro Cuore
Title: Assessing the Impact of Public Support on Innovative Productivity
Abstract: Previous  policy evaluation literature mainly aimed at estimating the additional effect of public support on either firms’ innovative inputs or innovative outputs. This paper is an attempt to move one step further, combining the two (input and output) dimensions of innovation into a unique efficiency perspective. To this aim, the impact of public support on the ratio between innovative sales and innovative expenditures (innovative productivity) is estimated using a sample of firm-level data drawn from the third Italian Community Innovation Survey (CIS).
A bivariate endogenous switching model has been developed in order to free the analysis of any ex ante sources of sample selection and firm heterogeneity, at the same time getting rid of the two sources of endogeneity potentially affecting the results, i.e. the possible simultaneity between subsidy allocation and the qualitative composition of the innovative output, as well as the endogeneity of public support with respect to innovative performance.
Results show that innovative productivity is negatively affected by the public support ; far from ‘doing better’ as a result of government intervention, supported firms appear to exhaust their advantage through merely increasing their innovative expenditures.
Length: 
Creation-Date: 2011-11
Publication-Status: 
File-URL: http://www.unicatt.it/dipartimenti/DISES/allegati/dises1177.pdf
File-Format: Application/pdf
File-Function: First version, aaaa
Number: dises1177
Classification-JEL: O32; O38
Keywords: innovation subsidy; policy evaluation; product innovation; bivariate endogenous switching model
Handle: RePEc:ctc:serie2:dises1177