Government Subsidies and Corporate Outcomes: An Empirical Study of a Northern Italian Initiative

This study investigated the statistical association between public incentives and industrial innovation as reflected in firms’ financial performances. In particular, the analysis was carried out considering a Regional Operational Program, namely, the 2007–2013 ERDF Regional Program in Lombardy, and investigating a dataset of Lombardy-based companies that received support through the mentioned initiative. For each of them, balance sheet variables before and after the acquisition of the incentive and the development of the related innovation project were detected and analyzed by means of both standard and normalized linear regression. Notably, normalized regressions showed that higher subsidy intensity was positively associated with subsequent changes in revenues and intangible assets, especially among manufacturing firms, thereby supporting policies that target sectors with a high innovation capacity. Furthermore, this research underscores the importance of tailoring policy instruments to local and sectoral contexts, recognizing the limitations of one-size-fits-all approaches. In keeping with this exploratory stance, this study does not build a counterfactual control group and makes no causal claims; it simply documents balance sheet associations that may inform future, impact-oriented research. Given the absence of a control group, the design is observational; all findings describe associations and do not allow causal inference.