Public policy for innovation and internationalization: are they worth it?

Abstract

This study contributes to the debate about the role of industrial policies for innovation and internationalization on local economic performance. A panel data analysis on Italian regions examines the interrelationships between public grants, level of innovation and internationalization and economic performance. The main findings are that (1) the impact of pro-innovation policies on economic performance is higher in internationalized regions and (2) the level of local R&D expenditures does not contribute to the effectiveness of subsidies for internationalization.

Keywords:

• regional economic performance
• public policies
• innovation
• internationalization

JEL Classification:

• H25
• O10
• R11

Notes

¹To obtain comparable coefficients, all the explanatory variables have been standardized. It is also worth noting that the degree of correlation between all the variables is reasonably low.