2023/41 | LEM Working Paper Series | ||||||||||||||||
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Digital Advantage: Evidence from a Policy Evaluation of Adoption Subsidies |
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Antonio Ughi and Andrea Mina |
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Keywords | |||||||||||||||||
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Advanced manufacturing; Industry 4.0; Technology diffusion; Adoption subsidies;
Industrial strategy.
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JEL Classifications | |||||||||||||||||
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D20, O33, O25
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Abstract | |||||||||||||||||
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Investments in advanced manufacturing technologies are expected to generate substantial gains
for firms. The aim of this work is to evaluate the nature and extent of such gains. We use
information on the ''Nuova Sabatini'' subsidy - an important policy measure adopted in Italy
over the last few years - and employ a Difference-in-Differences methodology to estimate the
effects of digital technologies on adopters relative to a first control group of applicants whose
funding was revoked, and a second one obtained through statistical matching. The analysis
exploits the rare opportunity of bringing together data from the Italian ''National Register of
State Aids'' (NRA), confidential data from the Ministry of Economic Development (MiSE),
and financial data from the complete business register of the Italian Chambers of Commerce
(InfoCamere). Results show that new digital investments have positive effects on productivity
and that the policy is effective in boosting the overall performance of treated firms. In addition,
there is no evidence that digital adoption results in technological unemployment.
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