EFFICACIA E PERSISTENZA DELL'EFFETTO DEI SUSSDDI PUBBLICI SULLA RIMOZIONE DEI VINCOLI FINANZIARI DELLE GIOVANI IMPRESE AD ALTA TECNOLOGIA EFFICACY AND PERSISTENCY OF THE EFFECT OF PUBLIC SUBSIDIES ON NEW TECHNOLOGY-BASED FIRMS' FINANCIAL CONSTRAINTS

摘要

The paper analyses the effect of public subsidies on firm investments, using a longitudinal sample of two hundred ninety-four Italian unlisted owner-managed new-technology-based firms (NTBFs) observed from 1994 to 2003. We have adopted a modified version of the Euler equation and the use of GMM-system estimation techniques that duly take into account the endogenous nature of public finance. Our findings indicate that small NTBFs rely significantly on internal capital to finance their investments. Small NTBFs that benefit from public subsidies show an increase in the investment rate and a reduction in investment cash flow sensitivity in the year immediately after that when they received the public funds. We interpret these results as an indication of the relaxation of financial constraints. Moreover, while the increase in the investment rate does not persist in the long run, the dependence of investments on cash flows vanishes immediately after the receipt of public subsidies and remains negligible afterwards.