The Influence of Regional Subsidies to Innovation on Beneficiary Firms’ Financial Statements: A Comparison Between a Couple of Italian Regions

The paper aims to investigate whether regional innovation subsidies have a relevant effect for beneficiary firms, taking into account a couple of different regions in Italy, namely Lombardy and Sicily, characterized by different subsidy rules and local productive structures. The financial statements of beneficiary companies—analysed as two separate regional samples, 60 firms in Lombardy and 69 in Sicily—before the innovation program (2010) and after its fulfilment (2018) were compared and related to the obtained grant, separately within each region, in order to verify if a significant relationship exists. The two regional samples are analysed separately. The analysis includes beneficiary firms and contains neither rejected applicants nor non-beneficiary firms. Actually, in Lombardy, higher subsidy intensity is positively associated with revenue growth, personnel-cost growth, and intangible-asset growth, with the latter concentrated in manufacturing; in Sicily, no linear pattern emerges within the common intensity range. The main reasons of this contrast are discussed in the paper and have to be mainly associated with the different productive structures in the two regions and with the rules and procedures of the subsidy programs.