This repository contains the programming project using Python for the course "Effective Programming Practices for Economists". This project is the reproducible replication of Bronzini, R., & Iachini, E. (2014). Are incentives for R&D effective? Evidence from a regression discontinuity approach. American Economic Journal: Economic Policy, 6(4), 100-134. To guarantee reproducibility, we use the Gaudecker Econ Project Templates.
This paper investigates the effectiveness of a unique R&D subsidy program implemented in northern Italy. The government asked firms to submit proposals for new projects, and among them, only projects with a score above a certain threshold received the subsidy. They use a sharp regression discontinuity design to compare the investment spending of subsidized firms with that of unsubsidized firms. They observe evidence that for the whole sample there is no significant increase in investment. However, removing the heterogeneity in the size of firms, their findings show public funds increase small firms' investments, whereas larger firms were not affected by subsidy.
Bronzini, R., & Iachini, E. (2014). Are incentives for R&D effective? Evidence from a regression discontinuity approach. American Economic Journal: Economic Policy, 6(4), 100-134.
Wooldridge, J. M. (2016). Introductory econometrics: A modern approach. Nelson Education.