Augusto Cerqua

Are the Subsidies to Private Capital Useful? A Multiple Regression Discontinuity Design Approach

There is still little consensus on the effectiveness of business support policies. The empirical evaluation is complicated by the difficulty in achieving reliable identification. We analyse the impact of Law 488/92, the main Italian regional policy. We propose a new approach, named multiple regression discontinuity design that exploits the sharp discontinuities in the L488 rankings and extends the RDD approach to a context where the treatment is assigned by multiple rankings with different cut-off points. We find that the impact of L488 on investment and production of the financed firms is positive and statistically significant.

Are we spending too much to grow? The case of Structural Funds

We evaluate whether the impact of EU Structural and Cohesion Funds (EUF) on Member States’ regional economic growth depends on the intensity of treatment, measured by the normalized amount of funds distributed in each region. We use an original dataset that covers all the main sources of EUF and extend the regression discontinuity design to the case of continuous treatment. The results suggest an average positive effect on regional growth. The estimated conditional intensity-growth function is concave and presents a maximum value. Therefore, the exceeding funds could have been allocated to other lagging regions without reducing the effect on growth.

Natural disasters and university enrolment: evidence from L’Aquila earthquake

ABSTRACT Although there are several studies looking at the effect of natural disasters on economic growth, less attention has been dedicated to their impact on educational outcomes, especially in more developed countries. We use the synthetic control method to examine how the L’Aquila earthquake affected subsequent enrolment at the local university. This issue has wide economic implications as the University of L’Aquila made a large contribution to the local economy before the earthquake. Our results indicate that the earthquake had no statistically significant effect on first-year enrolment at the University of L’Aquila in the three academic years after the disaster. This natural disaster, however, caused a compositional change in the first-year student population, with a substantial increase in the number of students aged 21 or above. This is likely to have been driven by post-disaster measures adopted in order to mitigate the expected negative effects on enrolment triggered by the earthquake.

The signalling effect of eco-labels in modern coastal tourism

ABSTRACT As the demand for environmentally sustainable tourism grows, eco-labels are becoming increasingly popular as a signal of environmental quality. However, the existence of a causal link between awarding a seaside eco-label and the increase in tourism flows is still under discussion in the literature. In this article, we gauge the signalling impact of a specific eco-label, the Blue Flag award, using detailed data on tourism flows to seaside Italian destinations during the period 2008–2012. We adopt a recent econometric modelling strategy – the synthetic control method – in shaping estimation results and testing the sensitivity and robustness of our results. We find that being awarded the Blue Flag increases the flow of domestic tourists for up to three seasons after assignment. However, we find no effect for the flow of international tourists. Investigating the mechanisms driving the results, we find that the award of a Blue Flag only positively affects the flow of domestic tourists when it is used as a driver of organisation, coordination and integrated management of the tourism supply.

Conviene incentivare le piccole imprese piuttosto che le grandi? Un’analisi basata sul multiple regression discontinuity design

Capital subsidies are usually adopted to overcome credit market imperfections and compensate for local external diseconomies common in backward areas. Such rationales usually holds stronger for small firms. This might mean that small firms benefit the most from business subsidy policies. Using a multiple regression discontinuity design we evaluate the effectiveness of the main Italian regional policy in the period 1996-2007 - the Law 488/92 (L. 488) - in achieving economic growth for firms of different sizes. We find that the impact of the subsidies on employment, investment, and turnover is positive and statistically significant for micro and small firms, while it is not statistically different from zero for medium and large firms. On the other side, the effect on productivity is negligible irrespective of the firms’ size. This might mean that are the smaller firms that really need the Government support to grow.