The impact of public support to SMEs' outward FDI: evidence from Italy

Bannò, M., Piscitello, L. and Varum, C. A. (2014) The impact of public support to SMEs' outward FDI: evidence from Italy. Journal of Small Business Management, 52 (1). pp. 22-38. ISSN 1540-627X doi: 10.1111/jsbm.12029

Abstract/Summary

This paper evaluates the impact of public financial support to the internationalization of small and medium enterprises. We analyze the growth performance of firms that conducted outward foreign direct investments in the period 1994–2008, comparing firms that benefited from public support (380) with a sample of firms that also internationalized their activity in the same period but without any incentive (508). The econometric results, stemming from a two‐step treatment effect model, reveal that incentives are effective in enhancing firms' performance in terms of domestic turnover and productivity growth, especially when they are targeted at smaller and younger firms. Moreover, the effect of the incentives is enhanced for firms that have accumulated international experience.