Does regional funding for enterprises have an effect on employment levels?

Abstract

The article deals with ‘Regional financing for enterprises has an effect on employment levels?’, placing the theme in the economic, social and territorial framework discussed by the authors. The latter was mainly focused on the impact of these programmes on the productivity and profitability of the beneficiary companies, but did not reach solid conclusions (Harris and Trainor, 2005; Bergstrom, 2000; Lee, 1996). In fact, to show the most important net increases in employment terms are some enterprises that have received substantial incentives (even above €500,000). The measure showing better effects is the FRIM Fund in which the increase in employment for processed enterprises is considerably higher than those not treated. The results obtained therefore show a better employment performance for the only measure that did not grant fund grants but loans on behalf of interest at a reduced rate. This can mean both that the beneficiary companies of the FRIM fund have presented better and potentially more performing projects (thanks to more selective selection criteria), and that the type of facilitation granted has been more congenial the needs of the enterprises.

Keywords

labour market; Cohesion policy; agriculture; Lombardy; public policy; Productivity

JEL codes

J21; J64; R58