Does the Running Variable Matter? A Second Look at Discontinuity Designs for Evaluating Regional Economic Development and Business Incentive Policies

Regional economic development and business incentive programs have a prominent role in the European Union (EU). For evaluating these programs, in recent years, a growing number of studies have exploited either spatial discontinuities, set by boundaries of the targeted areas, or ranking discontinuities, based on EU-fund eligibility indexes or firm-level application scores. In light of this literature, impact evaluations are being increasingly commissioned and designed under an a-priori assumptions that discontinuity designs have superior impact identification properties. This paper argues that in a number of frequently encountered, but often unrecognized, circumstances this assumption does not hold ground. When the running variable has a weak influence on the outcome of the analysis, discontinuity designs are at risk of either unnecessarily reduce external validity or, in the presence small sample sizes, failing to achieve the complete balancing of relevant controls. In this scenario, ensuring the common support for the crucial confounders and adopting statistical matching estimators, often constitute a more viable empirical option.FC

Does the Running Variable Matter? A Second Look at Discontinuity Designs for Evaluating Regional Economic Development and Business Incentive Policies

Regional economic development and business incentive programs have a prominent role in the European Union (EU). For evaluating these programs, in recent years, a growing number of studies have exploited either spatial discontinuities, set by boundaries of the targeted areas, or ranking discontinuities, based on EU-fund eligibility indexes or firm-level application scores. In light of this literature, impact evaluations are being increasingly commissioned and designed under an a-priori assumptions that discontinuity designs have superior impact identification properties. This paper argues that in a number of frequently encountered, but often unrecognized, circumstances this assumption does not hold ground. When the running variable has a weak influence on the outcome of the analysis, discontinuity designs are at risk of either unnecessarily reduce external validity or, in the presence small sample sizes, failing to achieve the complete balancing of relevant controls. In this scenario, ensuring the common support for the crucial confounders and adopting statistical matching estimators, often constitute a more viable empirical option.FC

Does EU Public Support to Firm Investments Boost High Quality Jobs? Evidence from Linked Employer-Employee Microdata and Natural-Experiment Conditions

In this paper we estimate the impact on job quality of the direct support to firm- investment projects provided through the EU cohesion policy funds. We use linked employer-employee micro-data, from administrative sources, that cover the universe of Portuguese firms over the years 2000s. The analysis exploits the existence of natural experiment conditions in the form of treatment assignment procedures based on exogenous cut-offs in the ranking of the applicant firms. Our preferred estimation strategy is a dynamic exact matching procedure that is combined with a difference-in-difference scheme to mimic a block-randomised pretest-posttest design. The procedure is adopted separately for each of the successive cohorts of applicants and solves the small sample issues that would be encountered with a multiple-ranking regression discontinuity design. Our results indicate that the firm-level support co-funded by EU structural funds in Portugal has contributed to improving job quality compared to the counterfactual scenario of no public support, with each treated firm creating on average 4.9 additional standard-working-time jobs, 2.9 skilled jobs, and 2.0 permanent contract jobs. We also estimate that the average remuneration per hour in treated firms is €2.2 higher than in similar non-treated applicant firms. These results are adequately robust to a wide range of sensitivity analyses and bear some relevant policy implications for the EU.FC

Does EU Public Support to Firm Investments Boost High Quality Jobs? Evidence from Linked Employer-Employee Microdata and Natural-Experiment Conditions

In this paper we estimate the impact on job quality of the direct support to firm- investment projects provided through the EU cohesion policy funds. We use linked employer-employee micro-data, from administrative sources, that cover the universe of Portuguese firms over the years 2000s. The analysis exploits the existence of natural experiment conditions in the form of treatment assignment procedures based on exogenous cut-offs in the ranking of the applicant firms. Our preferred estimation strategy is a dynamic exact matching procedure that is combined with a difference-in-difference scheme to mimic a block-randomised pretest-posttest design. The procedure is adopted separately for each of the successive cohorts of applicants and solves the small sample issues that would be encountered with a multiple-ranking regression discontinuity design. Our results indicate that the firm-level support co-funded by EU structural funds in Portugal has contributed to improving job quality compared to the counterfactual scenario of no public support, with each treated firm creating on average 4.9 additional standard-working-time jobs, 2.9 skilled jobs, and 2.0 permanent contract jobs. We also estimate that the average remuneration per hour in treated firms is €2.2 higher than in similar non-treated applicant firms. These results are adequately robust to a wide range of sensitivity analyses and bear some relevant policy implications for the EU.FC

Valutazione delle politiche pubbliche per l'artigianato 2005-2007 : la distribuzione degli aiuti e la stima dell\u2019impatto occupazionale

La valutazione delle politiche pubbliche proposta in questo volume raggiunge un insieme di obiettivi complessi. Si evidenzia la ripartizione del totale delle agevolazioni pubbliche regionali concesse alle imprese artigiane piemontesi nel periodo 2005-2007 tramite le misure di intervento specifiche e quelle genericamente rivolte alle PMI in base alle caratteristiche delle imprese beneficiate (per settore di attivit\ue0, dimensione, anzianit\ue0 di avviamento ) ed in base alla loro localizzazione geografica. I risultati ottenuti da questo tipo di analisi permettono di fornire un quadro completo delle tipologie di imprese artigiane beneficiate dai diversi provvedimenti. Si esamina il peso delle imprese beneficiate sul totale delle imprese artigiane attive evidenziando, per ciascuna tipologia di attivit\ue0 produttiva, dimensione e/o localizzazione geografica, quanta parte delle imprese attive risulti effettivamente beneficiata dai diversi provvedimenti di aiuto. Si realizza infine una argomentata stima dell\u2019impatto occupazionale integrato dell\u2019insieme di tutti i provvedimenti di agevolazione di cui hanno beneficiato le imprese artigiane piemontesi nel periodo 2005-2007, adottando (sulla base dei dati di fonte INPS integrati alle informazioni dell\u2019Albo Imprese Artigiane) una metodologia statistico/econometrica di tipo controfattuale in grado di evidenziare gli effetti addizionali delle agevolazioni come scostamento rispetto alla variazione congiunturale che si sarebbe prodotta in assenza dell\u2019intervento pubblico. L\u2019impatto occupazionale cos\uec stimato \ue8 dunque riferito all\u2019effetto addizionale dei provvedimenti di aiuto e non ad un semplice computo del numero di posti di lavoro attivati dagli investimenti sussidiati. I risultati forniti da questo tipo di analisi offrono al decisore regionale una base informativa d\u2019insieme per individuare eventuali situazioni di sperequazione tra le diverse tipologie d\u2019imprese artigiane circa il loro effettivo accesso alle diverse forme complessive di agevolazione

Regional State Aid Control in Europe: A Legal and Economic Assessment

This paper provides a legal and economic analysis of the European rules for regional State aid according to Article 107 (1) and (3) TFEU. It summarizes the historical evolution and the trends of regional aid rules and describes the economic rationale behind them. The main principles are discussed with reference to recent academic research, leading cases and the State Aid Modernization initiative ("SAM"). The current rules for the assessment of compatibility as laid down in the General Block Exemption and the Regional Aid Guidelines 2014 are critically reviewed in light of these principles

What's in a Sign? Trademark Law and Economic Theory

Abstract: The aim of this paper is to summarise the extant theory as it relates to the economics of trademark, and to give some suggestions for further research with reference to distinct streams of literature. The proposed line of study inevitably looks at the complex relationship between signs and economics. Trademark is a sign introduced to remedy a market failure. It facilitates purchase decisions by indicating the provenance of the goods, so that consumers can identify specific quality attributes deriving from their own, or others', past experience. Trademark holders, on their part, have an incentive to invest in quality because they will be able to reap the benefits in terms of reputation. In other words, trademark law becomes an economic device which, opportunely designed, can produce incentives for maximising market efficiency. This role must, of course, be recognised, as a vast body of literature has done, with its many positive economic consequences. Nevertheless, trademark appears to have additional economic effects that should be properly recognized: it can determine the promotion of market power and the emergence of rent-seeking behaviours. It gives birth to an idiosyncratic economics of signs where very strong protection tends to be assured, even though the welfare effects are as yet poorly understood. In this domain much remains to be done and the challenge to researchers is open

Housing Policies in China: Issues and Options

This article consists in three parts. The first part deals with theory. We evaluate the pros and cons of government involvement in urban housing and of renting versus ownership. In the second part, we summarize the different housing policies that have been implemented in the United States, Europe, and Asia. We draw some conclusions. In particular, we show that there is a tradeoff between encouraging home ownership and social housing since countries that have favor the former have neglected the latter (like Japan, Spain, etc.). In the third part, we use the theory and the international policy parts to address housing policy issues in China. One of the main concerns in Chinese cities is the raise of poverty mainly by illegal migrants (who are Chinese rural residents) living in urban villages. We propose two steps to fight against poverty in Chinese cities. The first one is to require that the Chinese government recognizes these illegal migrants by helping them becoming legal. The second step is to encourage social housing that directly or indirectly subsidizes housing for the poor. In that case, to fight against poverty, one can either implement place-targeted policies (like the enterprise zone programs in the US and Europe and/or housing projects in the US, UK, or France) or people-targeted policies (like the MTO programs in the US). We also discuss other issues related to poverty. In particular, we suggest that the government could also try to keep migrants in rural areas by attracting firms there and/or introduce a microfinance system that helps them become entrepreneur