Industrial policy evaluation in the presence of spillovers

Online Appendix

Online Appendix A. Data Description

In our application, we looked for subsidised areas that neighbour non-subsidised areas. The main criterion adopted to choose these areas was their similarity in GDP per capita,[1] industrial composition, and cultural traditions. Moreover, we excluded the areas of Rome and Naples because such large urban agglomerations have special features that are clearly distinct from the other peripheral areas analysed.

The initial pool of firms consisted of all the subsidised and non-subsidised firms in the areas under analysis. After the merging procedure (using the VAT identification number as firm identifier), the total number of manufacturing firms under analysis was 2,475. We then proceeded with the removal of the following categories of observations to estimate the ATT and the ASA:

-Concerning duplicate projects, i.e., applications for more than one auction, we decided to exclude the non-financed projects if the referring firm had already received L488 funds in a previous auction.

-We considered only firms that had a meaningful balance sheet since at least 1993 (start-ups).

-Projects that presented anomalies and irregularities[2]were not considered.

-Financed firms whose investment programme was not yet concluded in 2001 have been discarded.

After verifying that the cleaning and integration procedures do not have a different impact on the treatment and the control group, we turned our attention to the final dataset on which the evaluation model was implemented. This dataset consists of 213 subsidised firms, 195affected firms with the closest treated neighbour of the same sector within 1 mile distance, 280affected firms with the closest treated neighbour of the same sector within a 1 mile to 10 km distance, 218affected firms with the closest treated neighbour of the same sector within a 10 to 20 km distance, and 1,352 control firms.[3]

To check for territorial shocks, we have constructed another sample all the tertiary sector firms (code G of the NACE2002 classification). This subsample of service firms consists of 510 firms located in eligible areas and 759 firms located in non-eligible areas.

Online Appendix B. Checking for the presence of territorial shocks

When we check for the presence of territorial shocks, we substitute the number of neighbours within 10 kmwith the tangible capital in 1995 among the coarsening variables, and we coarsen such variable, the growth rate of tangible capital from 1993 to 1995, and the turnover in 1995 into quartiles. Coarsening the joint distributions of the selected covariates, we create 110strata (83 of which were matched). The results are shown in Table B.1.

Table B.1

Territorial shocks estimates

CEM-DiD / CEM-DiD without the strata where the firms located in the eligible area more than doubled the firms located in the non-eligible area / Kernel matching after using the CEM to restrict the data and the removal of the strata / Mahalanobis-metric matching after using the CEM to restrict the data and the removal of the strata
Yearly growth rate of
tangible capital / 0.95 / 1.16 / 0.85 / 0.14
(1.01) / (1.03) / (1.06) / (1.31)
Yearly growth rate of
turnover / 0.64 / 0.66 / 0.68 / 0.96
(0.51) / (0.52) / (0.54) / (0.68)
Absolute employment
change for each firm / 0.25 / 0.15 / 0.28 / 0.25
(0.40) / (0.40) / (0.44) / (0.55)
Nb. matched service firms located in the eligible area / 491 / 471 / 471 / 471
Nb. Controls / 729 / 719 / 719 / 719

Note: The Standard Errors are in parentheses. When we remove the strata where the firms located in the eligible area more than doubled the firms located in the non-eligible area, we lose 30 observations (20 firms located in the eligible area and 10 firms located in the non-eligible area).

***p<0.01, **p<0.05, *p<0.1.

The difference between the two groups of service firms is 0.14 to 1.16% for the yearly growth rate of tangible capital,0.64 to 0.96% for the yearly growth rate of turnover, and0.15 to 0.28 for the absolute employment change. Although all these estimates are positive, they are never statistically significant. Moreover, their extent is almost negligible, and the results would change only marginally even if they were subtracted them from the ATT.

Online Appendix C. Robustness analyses

We check the robustness of our results by using the same set of conditioning variables used in Section 4except that we now use different criteria to determine the interacting sectors. First, we carry out a more disaggregated analysis considering all manufacturing divisions from 15 to 37 of the 2-digit NACE 2002 classification as non-interacting subgroups. Second, weperform a more aggregated analysis aswe only aggregate sectors for which the input-output matrix (year 2000) shows a monetary value of inputs which is at least 5% of the total output monetary value for at least one of the sectors. Such aggregation entails the presence of 5 non-interacting clusters of manufacturing firms.

Table C.1

Pre-treatment differences between the treated/affected and the controls with a more disaggregatedcoarsening specification

Averages computed without using the CEM weights / Averages computed after using the CEM weights
Variables / Treatment/Affected Group / Control Group / Difference / Control Group / Difference
Treated / Tangible Capital 1995 / 2,885 / 1,433 / (1,452)*** / 2,346 / (539)
Turnover 1995 / 10,923 / 5,778 / (5,145)*** / 9,688 / (1,235)
Growth rate of tang. cap. 93-95 / 24.39 / 20.67 / (3.72) / 21.08 / (3.31)
ROE in 1995 / 17.88 / 9.11 / (8.77)*** / 12.36 / (5.52)
Nb. of workers in 1995 / 58.16 / 34.55 / (23.61)*** / 53.11 / (5.05)
Nb. Of neighbours in 10 km / 6.77 / 10.76 / (-3.99)*** / 6.23 / (0.54)
Added value in 1995 / 3,244 / 1,916 / (1,328)*** / 2,722 / (522)
Liabilities in 1995 / 11,189 / 5,190 / (5,999)*** / 9,755 / (1,434)
Affected (first mile) / Tangible Capital 1995 / 1,211 / 1,053 / (158) / 992 / (219)
Turnover 1995 / 3,823 / 4,118 / (-295) / 3,736 / (87)
Growth rate of tang. cap. 93-95 / 8.10 / 13.62 / (-5.52) / 5.19 / (2.91)
ROE in 1995 / 7.64 / 1.93 / (5.71) / 2.88 / (4.76)
Nb. of workers in 1995 / 23.96 / 23.52 / (0.44) / 23.60 / (0.36)
Nb. Of neighbours in 10 km / 13.73 / 7.06 / (6.67)*** / 10.16 / (3.57)*
Added value in 1995 / 975 / 1,058 / (-83) / 1,013 / (-38)
Liabilities in 1995 / 3,856 / 3,647 / (209) / 3,390 / (466)
Affected (between 1 mile and 10 km) / Tangible Capital 1995 / 1,014 / 709 / (305)** / 791 / (223)
Turnover 1995 / 3,203 / 3,236 / (-33) / 2,954 / (249)
Growth rate of tang. cap. 93-95 / 18.13 / 19.82 / (-1.69) / 17.00 / (1.13)
ROE in 1995 / 6.54 / 7.20 / (-0.66) / 5.40 / (1.14)
Nb. of workers in 1995 / 21.15 / 22.02 / (-0.87) / 20.61 / (0.54)
Nb. Of neighbours in 10 km / 12.90 / 21.48 / (-8.58)*** / 11.15 / (1.75)
Added value in 1995 / 814 / 884 / (-70) / 828 / (-14)
Liabilities in 1995 / 3,405 / 2,779 / (626) / 2,827 / (578)
Affected (between 10 and 20 km) / Tangible Capital 1995 / 978 / 668 / (310)** / 741 / (237)*
Turnover 1995 / 3,240 / 3,631 / (-391) / 3,731 / (-491)
Growth rate of tang. cap. 93-95 / 10.69 / 21.06 / (-10.37)*** / 14.88 / (-4.19)
ROE in 1995 / 5.74 / 9.21 / (-3.47) / 6.21 / (0.47)
Nb. of workers in 1995 / 22.14 / 23.14 / (-1.00) / 24.00 / (-1.86)
Nb. Of neighbours in 10 km / 9.38 / 23.75 / (-14.37)*** / 12.97 / (-3.59)**
Added value in 1995 / 851 / 886 / (-35) / 917 / (-66)
Liabilities in 1995 / 3,319 / 2,912 / (407) / 3,154 / (165)

Note: The amounts are expressed in thousands of Euros. In computing the averages, we use only the firms within the common support after the CEM procedure and the strata removal (195 treated observations and the 743 controls for the ATT, 109affected observations and the 424 controls for the ASA within 1 mile, 190affected observations and the 776controls for the ASA between 1 mile and 10 km, and 218affected observations and the 810controls for the ASA between 10 and 20 km).

***p<0.01, **p<0.05, *p<0.1.

Tables C.1-C.4 report the pre-treatment differences between the treated/affected and the controls, and Tables C.2-C.5and Tables C.3-C.6 report the results for the ATT estimates and for the ASA, respectively.

Table C.2

ATT estimates with a more disaggregatedcoarsening specification

CEM-DiD / CEM-DiD without the 3 strata with more subsidised firms than controls / Kernel matching after using the CEM to restrict the data and the removal of 3 strata / Mahalanobis-metric matching after using the CEM to restrict the data and the removal of 3 strata
Yearly growth rate of
tangible capital / 8.11 / 8.25 / 7.87 / 7.76
(1.31)*** / (1.34)*** / (1.66)*** / (2.06)***
Yearly growth rate of
turnover / 2.86 / 2.39 / 2.22 / 2.73
(0.71)*** / (0.73)*** / (0.81)*** / (1.01)***
Absolute employment
change for each firm / 8.55 / 7.95 / 8.67 / 9.92
(1.62)*** / (1.56)*** / (2.10)*** / (2.50)***
TFP growth / -11.70 / -11.80 / -12.31 / -13.31
(3.11)*** / (3.16)*** / (3.56)*** / (4.41)***
Nb. matched subsidised firms / 203 / 195 / 195 / 195
Nb. Controls / 747 / 744 / 744 / 744

Note: The Standard Errors are in parentheses. Of the 747 controls, there were 79 firms located in Obj.2 areas that received L488 funds. To take into account the negative bias that these subsidies bring about, we subtract the amount subsidised to those observations from the numerator of the first two dependent variables. Repeating the CEM-DiD estimation, we find that the difference between the two groups of firms is 8.52% for the yearly growth rate of tangible capital and 2.97% for the yearly growth rate of turnover. These estimates are statistically significant at the 1% level. When we remove the 3 strata with more subsidised firms than controls, we lose 11 observations (8 treated and 3 control firms).

***p<0.01, **p<0.05, *p<0.1.

Table C.3

ASA estimates with a more disaggregatedcoarsening specification

CEM-DiD / CEM-DiD without the strata with more affected firms than controls / Kernel matching after using the CEM to restrict the data and the removal of the strata in the previous step / Mahalanobis-metric matching after using the CEM to restrict the data and the removal of the strata in the previous step
Within 1 mile / Yearly growth rate of
tangible capital / 0.49 / 1.76 / -0.59 / 1.78
(1.50) / (1.60) / (1.84) / (2.41)
Yearly growth rate of
turnover / 0.43 / -0.52 / -0.79 / -1.06
(0.93) / (0.96) / (1.26) / (1.53)
Absolute employment
change for each firm / -0.79 / -1.62 / -3.94 / -1.28
(1.40) / (1.34) / (1.60)** / (2.33)
TFP growth / -2.62 / -2.94 / -3.19 / -9.10
(4.01) / (4.29) / (4.71) / (5.86)
Nb. matchedaffected firms / 117 / 102 / 102 / 102
Nb. Controls / 429 / 424 / 424 / 424
Within 1 mile to10 km / Yearly growth rate of
tangible capital / 0.94 / 0.40 / -1.28 / 2.95
(1.24) / (1.27) / (1.37) / (1.73)*
Yearly growth rate of
turnover / 0.62 / 0.66 / 0.79 / 0.73
(0.73) / (0.76) / (0.85) / (1.08)
Absolute employment
change for each firm / 0.03 / 0.11 / 0.36 / 1.71
(1.06) / (1.10) / (1.24) / (1.45)
TFP growth / -0.15 / 0.91 / 1.36 / -0.09
(3.07) / (3.19) / (3.56) / (4.50)
Nb. matchedaffectedfirms / 205 / 191 / 191 / 191
Nb. Controls / 782 / 778 / 778 / 778
Within 10 to 20 km / Yearly growth rate of
tangible capital / -1.00 / -1.13 / -1.80 / 0.28
(1.27) / (1.30) / (1.34) / (1.73)
Yearly growth rate of
turnover / -0.31 / -0.44 / -0.57 / -0.61
(0.70) / (0.72) / (0.84) / (1.03)
Absolute employment
change for each firm / 0.14 / -0.07 / -0.49 / -1.97
(1.02) / (1.01) / (1.22) / (1.73)
TFP growth / -4.38 / -3.92 / -4.38 / -2.98
(2.90) / (2.96) / (3.34) / (4.50)
Nb. matchedaffectedfirms / 226 / 219 / 219 / 219
Nb. Controls / 819 / 803 / 803 / 803

Note: The Standard Errors are in parentheses. Correcting for the negative bias caused by the firms located in Obj.2 areas that received L488 funds, we find that the difference between the two groups of firms is i) 0.80%, 1.32%, and -0.82% for the yearly growth rate of tangible capital; ii) 0.48%, 0.69%, and -0.27% for the yearly growth rate of turnover for the ASA within 1 mile, the ASA within 1 mile to 10 km, and the ASA within 10 to 20 km, respectively. These estimates are not statistically significant. When we remove the strata with more affected firms than controls, we lose 16 observations (11 affected and 5 control firms), 18 observations (14 affected and 4 control firms), and 11 observations (7 affected and 4 control firms) for the ASA within 1 mile, the ASA within 1 mile to 10 km, and the ASA with 10 to 20 km, respectively.

***p<0.01, **p<0.05, *p<0.1.

Table C.4

Pre-treatment differences between the treated/affected and the controls with a more aggregated coarsening specification

Averages computed without using the CEM weights / Averages computed after using the CEM weights
Variables / Treatment/Affected Group / Control Group / Difference / Control Group / Difference
Treated / Tangible Capital 1995 / 2,821 / 1,160 / (1,661)*** / 1,788 / (1,033)**
Turnover 1995 / 9,635 / 5,254 / (4,381)*** / 7,443 / (2,192)
Growth rate of tang. cap. 93-95 / 22.88 / 20.51 / (2.37) / 20.32 / (2.56)
ROE in 1995 / 17.29 / 9.22 / (8.07)*** / 10.82 / (6.47)**
Nb. of workers in 1995 / 57.06 / 37.18 / (19.88)*** / 51.65 / (5.41)
Nb. Of neighbours in 10 km / 7.38 / 13.92 / (-6.54)*** / 10.09 / (-2.71)*
Added value in 1995 / 3,128 / 1,712 / (1,416)*** / 2,460 / (668)
Liabilities in 1995 / 11,805 / 5,840 / (5,965)*** / 8,997 / (2,808)
Affected (first mile) / Tangible Capital 1995 / 1,161 / 1,076 / (85) / 1,007 / (154)
Turnover 1995 / 3,868 / 4,742 / (-874)* / 3,919 / (-51)
Growth rate of tang. cap. 93-95 / 12.01 / 18.70 / (-6.69)** / 15.66 / (-3.65)
ROE in 1995 / 2.71 / 6.62 / (-3.91) / 3.07 / (-0.36)
Nb. of workers in 1995 / 24.30 / 27.73 / (-3.43) / 24.11 / (0.19)
Nb. Of neighbours in 10 km / 10.35 / 7.10 / (3.25)*** / 8.73 / (1.62)**
Added value in 1995 / 959 / 1,282 / (-323)*** / 1,096 / (-137)
Liabilities in 1995 / 3,909 / 4,184 / (-275) / 3,524 / (385)
Affected (between 1 mile and 10 km) / Tangible Capital 1995 / 990 / 912 / (78) / 859 / (131)
Turnover 1995 / 3,483 / 4,514 / (-1,031)** / 3,642 / (-159)
Growth rate of tang. cap. 93-95 / 13.34 / 21.49 / (-8.15)*** / 16.93 / (-3.59)
ROE in 1995 / 6.09 / 9.75 / (-3.66) / 5.40 / (0.69)
Nb. of workers in 1995 / 21.90 / 28.99 / (-7.09)*** / 23.57 / (-1.67)
Nb. Of neighbours in 10 km / 10.39 / 20.00 / (-9.61)*** / 10.32 / (0.07)
Added value in 1995 / 926 / 1,227 / (-301)*** / 1,021 / (-95)
Liabilities in 1995 / 3,389 / 3,850 / (-461) / 3,361 / (28)
Affected (between 10 and 20 km) / Tangible Capital 1995 / 1,232 / 879 / (353)** / 905 / (327)*
Turnover 1995 / 4,469 / 4,609 / (-140) / 4,448 / (21)
Growth rate of tang. cap. 93-95 / 9.34 / 21.47 / (-12.13)*** / 14.69 / (-5.35)
ROE in 1995 / 4.10 / 10.75 / (-6.65)** / 6.73 / (-2.63)
Nb. of workers in 1995 / 27.80 / 30.96 / (-3.16) / 28.10 / (-0.30)
Nb. Of neighbours in 10 km / 6.51 / 20.31 / (-13.80)*** / 14.19 / (-7.68)***
Added value in 1995 / 1,099 / 1,210 / (-111) / 1,117 / (-18)
Liabilities in 1995 / 4,429 / 3,970 / (459) / 4,018 / (411)

Note: The amounts are expressed in thousands of Euros. In computing the averages, we use only the firms within the common support after the CEM procedure and the strata removal (201 treated observations and the 1,036 controls for the ATT, 334affected observations and the 826 controls for the ASA within 1 mile, 294affected observations and the 1,119controls for the ASA between 1 mile and 10 km, and 148affected observations and the 1,047controls for the ASA between 10 and 20 km).

***p<0.01, **p<0.05, *p<0.1.

Table C.5

ATT estimates with a more aggregated coarsening specification

CEM-DiD / CEM-DiD without the 3 strata with more subsidised firms than controls / Kernel matching after using the CEM to restrict the data and the removal of 3 strata / Mahalanobis-metric matching after using the CEM to restrict the data and the removal of 3 strata
Yearly growth rate of
tangible capital / 7.77 / 7.81 / 7.07 / 8.00
(1.22)*** / (1.25)*** / (1.58)*** / (1.89)***
Yearly growth rate of
turnover / 2.70 / 2.44 / 2.21 / 1.97
(0.68)*** / (0.69)*** / (0.78)*** / (1.00)**
Absolute employment
change for each firm / 7.48 / 6.71 / 7.56 / 5.89
(1.53)*** / (1.52)*** / (2.06)*** / (2.62)**
TFP growth / -10.88 / -11.66 / -12.70 / -11.47
(2.83)*** / (2.90)*** / (3.45)*** / (4.49)**
Nb. matched subsidised firms / 210 / 202 / 202 / 202
Nb. Controls / 1,042 / 1,038 / 1,038 / 1,038

Note: The Standard Errors are in parentheses. Of the 1,042 controls, there were 129 firms located in Obj.2 areas that received L488 funds. To take into account the negative bias that these subsidies bring about, we subtract the amount subsidised to those observations from the numerator of the first two dependent variables. Repeating the CEM-DiD estimation, we find that the difference between the two groups of firms is 8.10% for the yearly growth rate of tangible capital and 2.76% for the yearly growth rate of turnover. These estimates are statistically significant at the 1% level. When we remove the X strata with more subsidised firms than controls, we lose 12 observations (8 treated and 4 control firms).

***p<0.01, **p<0.05, *p<0.1.

Table C.6

ASA estimates with a more aggregated coarsening specification

CEM-DiD / CEM-DiD without the strata with more affected firms than controls / Kernel matching after using the CEM to restrict the data and the removal of the strata in the previous step / Mahalanobis-metric matching after using the CEM to restrict the data and the removal of the strata in the previous step
Within 1 mile / Yearly growth rate of
tangible capital / -0.13 / -0.28 / -1.33 / -0.19
(1.06) / (1.08) / (1.13) / (1.59)
Yearly growth rate of
turnover / -0.13 / -0.30 / -0.30 / -1.26
(0.60) / (0.62) / (0.68) / (0.91)
Absolute employment
change for each firm / -1.89 / -1.82 / -2.48 / -2.15
(0.97)* / (1.00)* / (1.13)** / (1.61)
TFP growth / -1.63 / -1.38 / -0.02 / -1.29
(2.43) / (2.51) / (2.74) / (3.67)
Nb. matchedaffected firms / 349 / 334 / 334 / 334
Nb. Controls / 835 / 826 / 826 / 826
Within 1 mile to10 km / Yearly growth rate of
tangible capital / -0.12 / -0.07 / -1.14 / -0.38
(1.07) / (1.11) / (1.18) / (1.56)
Yearly growth rate of
turnover / -0.62 / -0.38 / -0.21 / -0.82
(0.60) / (0.61) / (0.66) / (0.87)
Absolute employment
change for each firm / -1.60 / -1.58 / -1.58 / -1.10
(0.90)* / (0.93)* / (0.95)* / (1.27)
TFP growth / -0.09 / 0.57 / 2.21 / 2.32
(2.46) / (2.52) / (2.92) / (3.78)
Nb. matchedaffectedfirms / 311 / 295 / 295 / 295
Nb. Controls / 1,135 / 1,121 / 1,121 / 1,121
Within 10 to 20 km / Yearly growth rate of
tangible capital / -2.36 / -2.58 / -3.08 / -1.44
(1.40)* / (1.45)* / (1.48)** / (1.92)
Yearly growth rate of
turnover / -0.07 / -0.07 / -0.42 / -1.50
(0.80) / (0.82) / (0.97) / (1.23)
Absolute employment
change for each firm / -1.08 / -1.03 / -1.96 / -1.47
(1.18) / (1.22) / (1.42) / (1.72)
TFP growth / -0.61 / -1.33 / -0.79 / -5.13
(3.53) / (3.53) / (3.91) / (5.13)
Nb. matchedaffectedfirms / 155 / 149 / 149 / 149
Nb. Controls / 1,058 / 1,053 / 1,053 / 1,053

Note: The Standard Errors are in parentheses. Correcting for the negative bias caused by the firms located in Obj.2 areas that received L488 funds, we find that the difference between the two groups of firms is i) 0.05%, 0.11%, and -2.21% for the yearly growth rate of tangible capital; ii) -0.07%, -0.56%, and -0.03% for the yearly growth rate of turnover for the ASA within 1 mile, the ASA within 1 mile to 10 km, and the ASA within 10 to 20 km, respectively. These estimates are not statistically significant. When we remove the strata with more affected firms than controls, we lose 24 observations (15 affected and 9 control firms), 30 observations (16 affected and 14 control firms), and 11 observations (6 affected and 5 control firms) for the ASA within 1 mile, the ASA within 1 mile to 10 km, and the ASA with 10 to 20 km, respectively.

***p<0.01, **p<0.05, *p<0.1.

Finally, we add some extra coarsening tothe CEMspecification of the main analysis. Hence, we add the tangible capital in 1995 among the coarsening variables, and we coarsen the growth rate of tangible capital from 1993 to 1995, and the turnover in 1995 into quartiles.This will reduce the distance in terms of pre-treatment variables between the treatment/affected group and the control group (Table C.7). Even if this causes a substantial reduction in the number of treated/affected observations, the tables below (Table C.8and Table C.9) show that the results are very similar to the ones obtained in the main analysis.

Table C.7

Pre-treatment differences between the treated/affected and the controls (restricted sample)

Averages computed without using the CEM weights / Averages computed after using the CEM weights
Variables / Treatment/Affected Group / Control Group / Difference / Control Group / Difference
Treated / Tangible Capital 1995 / 2,068 / 1,074 / (994)*** / 1,916 / (152)
Turnover 1995 / 8,281 / 4,564 / (3,717)*** / 7,521 / (760)
Growth rate of tang. cap. 93-95 / 26.65 / 18.86 / (7.79) / 20.71 / (5.94)
ROE in 1995 / 17.43 / 9.82 / (7.61)** / 11.64 / (5.79)
Nb. of workers in 1995 / 46.66 / 31.61 / (15.05)*** / 50.26 / (-3.60)
Nb. Of neighbours in 10 km / 6.61 / 6.50 / (0.11) / 5.54 / (1.07)
Added value in 1995 / 2,718 / 1,532 / (1,186)*** / 2,508 / (210)
Liabilities in 1995 / 9,235 / 5,149 / (4,086)*** / 8,950 / (285)
Affected (first mile) / Tangible Capital 1995 / 1,334 / 1,080 / (254) / 1,059 / (275)
Turnover 1995 / 4,298 / 4,329 / (-31) / 4,003 / (295)
Growth rate of tang. cap. 93-95 / 6.37 / 12.10 / (-5.73)* / 6.43 / (-0.06)
ROE in 1995 / 4.88 / 5.97 / (-1.09) / 5.31 / (-0.43)
Nb. of workers in 1995 / 27.08 / 27.24 / (-0.16) / 26.80 / (0.28)
Nb. Of neighbours in 10 km / 12.49 / 7.47 / (5.02)*** / 11.30 / (1.19)
Added value in 1995 / 1,062 / 1,216 / (-154) / 1,157 / (-95)
Liabilities in 1995 / 4,535 / 3,707 / (828) / 3,557 / (978)
Affected (between 1 mile and 10 km) / Tangible Capital 1995 / 885 / 1,182 / (-297)* / 910 / (-25)
Turnover 1995 / 3,204 / 4,356 / (-1,152)* / 3,497 / (-293)
Growth rate of tang. cap. 93-95 / 14.21 / 15.66 / (-1.45) / 15.84 / (-1.63)
ROE in 1995 / 2.50 / 0.13 / (2.37) / 0.63 / (1.87)
Nb. of workers in 1995 / 21.30 / 28.27 / (-6.97)** / 23.54 / (-2.24)
Nb. Of neighbours in 10 km / 12.57 / 7.25 / (5.32)*** / 8.51 / (4.06)***
Added value in 1995 / 853 / 1,201 / (-348)** / 1,005 / (-152)
Liabilities in 1995 / 3,081 / 4,250 / (-1,169)** / 3,495 / (-414)
Affected (between 10 and 20 km) / Tangible Capital 1995 / 1,093 / 867 / (206) / 937 / (156)
Turnover 1995 / 3,517 / 4,252 / (-612) / 4,063 / (-546)
Growth rate of tang. cap. 93-95 / 11.44 / 17.59 / (-6.15) / 14.63 / (-3.19)
ROE in 1995 / 3.92 / 7.02 / (-3.10) / 4.55 / (-0.63)
Nb. of workers in 1995 / 24.74 / 28.14 / (-2.72) / 27.61 / (-2.87)
Nb. Of neighbours in 10 km / 7.49 / 17.29 / (-9.80)*** / 11.97 / (-4.48)**
Added value in 1995 / 979 / 1,099 / (-105) / 1,081 / (-102)
Liabilities in 1995 / 3,839 / 3,719 / (100) / 3,680 / (159)

Note: The amounts are expressed in thousands of Euros. In computing the averages, we use only the firms within the common support after the CEM procedure and the strata removal (129 treated observations and the 357 controls for the ATT, 131affected observations and the 299 controls for the ASA within 1 mile, 192affected observations and the 355controls for the ASA between 1 mile and 10 km, and 151affected observations and the 360controls for the ASA between 10 and 20 km).

***p<0.01, **p<0.05, *p<0.1.

Table C.8

ATT estimates (restricted sample)

CEM-DiD / CEM-DiD without the 3 strata with more subsidised firms than controls / Kernel matching after using the CEM to restrict the data and the removal of 3 strata / Mahalanobis-metric matching after using the CEM to restrict the data and the removal of 3 strata
Yearly growth rate of
tangible capital / 10.53 / 11.28 / 10.04 / 9.21
(1.74)*** / (1.79)*** / (2.20)*** / (2.56)***
Yearly growth rate of
turnover / 2.60 / 3.06 / 3.01 / 2.28
(0.95)*** / (0.99)*** / (1.06)*** / (1.36)*
Absolute employment
change for each firm / 7.79 / 7.96 / 9.47 / 8.06
(2.12)*** / (2.14)*** / (2.52)*** / (3.08)***
TFP growth / -14.37 / -14.36 / -13.25 / -16.97
(3.90)*** / (4.07)*** / (4.52)*** / (5.41)***
Nb. matched subsidised firms / 137 / 130 / 130 / 130
Nb. Controls / 359 / 355 / 355 / 355

Note: The Standard Errors are in parentheses. Of the 359 controls, there were 28 firms located in Obj.2 areas that received L488 funds. To take into account the negative bias that these subsidies bring about, we subtract the amount subsidised to those observations from the numerator of the first two dependent variables. Repeating the CEM-DiD estimation, we find that the difference between the two groups of firms is 10.97% for the yearly growth rate of tangible capital and 2.67% for the yearly growth rate of turnover. These estimates are statistically significant at the 1% level. When we remove the 3 strata with more subsidised firms than controls, we lose 11 observations (7 treated and 4 control firms).***p<0.01, **p<0.05, *p<0.1.

Table C.9

ASA estimates (restricted sample)

CEM-DiD / CEM-DiD without the strata with more affected firms than controls / Kernel matching after using the CEM to restrict the data and the removal of the strata in the previous step / Mahalanobis-metric matching after using the CEM to restrict the data and the removal of the strata in the previous step
Within 1 mile / Yearly growth rate of
tangible capital / 1.91 / 1.80 / 1.30 / 1.17
(1.51) / (1.61) / (1.95) / (2.32)
Yearly growth rate of
turnover / -0.52 / -0.75 / -0.37 / -1.91
(0.85) / (0.89) / (1.04) / (1.32)
Absolute employment
change for each firm / -2.87 / -3.85 / -2.70 / -5.44
(1.60)* / (1.65)** / (1.80) / (2.36)**
TFP growth / -2.79 / -2.45 / 1.01 / -2.85
(3.72) / (3.84) / (4.57) / (5.69)
Nb. matchedaffected firms / 143 / 131 / 131 / 131
Nb. Controls / 304 / 301 / 301 / 301
Within 1 mile to10 km / Yearly growth rate of
tangible capital / -0.23 / -0.49 / -0.16 / -0.69
(1.37) / (1.41) / (1.59) / (2.05)
Yearly growth rate of
turnover / -0.91 / -1.04 / 0.13 / -1.37
(0.86) / (0.88) / (1.00) / (1.31)
Absolute employment
change for each firm / -1.32 / -1.72 / -0.49 / -0.61
(1.39) / (1.48) / (1.64) / (2.13)
TFP growth / 2.29 / 3.21 / 7.76 / 7.41
(3.33) / (3.43) / (4.20)* / (5.62)
Nb. matchedaffectedfirms / 207 / 193 / 193 / 193
Nb. Controls / 359 / 355 / 355 / 355
Within 10 to 20 km / Yearly growth rate of
tangible capital / -0.32 / -0.92 / -1.55 / -2.38
(1.47) / (1.55) / (1.56) / (2.10)
Yearly growth rate of
turnover / 0.24 / 0.58 / 0.56 / -0.24
(0.89) / (0.91) / (0.98) / (1.23)
Absolute employment
change for each firm / -0.31 / 0.54 / 0.72 / 0.03
(1.58) / (1.58) / (1.66) / (2.05)
TFP growth / -2.77 / -3.76 / -2.61 / -5.79
(3.48) / (3.62) / (3.76) / (4.84)
Nb. matchedaffectedfirms / 165 / 151 / 151 / 151
Nb. Controls / 370 / 363 / 363 / 363

Note: The Standard Errors are in parentheses. Correcting for the negative bias caused by the firms located in Obj.2 areas that received L488 funds, we find that the difference between the two groups of firms is i) 2.20%, -0.09%, and -0.17% for the yearly growth rate of tangible capital; ii) -0.47%, -0.87%, and 0.27% for the yearly growth rate of turnover for the ASA within 1 mile, the ASA within 1 mile to 10 km, and the ASA within 10 to 20 km, respectively. These estimates are not statistically significant. When we remove the strata with more affected firms than controls, we lose 15 observations (12 affected and 3 control firms), 18 observations (14 affected and 4 control firms), and 21 observations (14 affected and 7 control firms) for the ASA within 1 mile, the ASA within 1 mile to 10 km, and the ASA with 10 to 20 km, respectively.