Using a sample of Italian manufacturing firms for the years 2002 2011, we investigate how government grants influence the creation of value added per assets of beneficiary firms. A set of multivariate tests shows that after grant reception, beneficiary firms underperform their non-beneficiary counterparts in terms of value added per assets and operating profitability while the overall profitability appears unaffected. Undertaking efficient investments thanks to grant reception appears a difficult task. The analysis raises questions on the real return to society on the investment of public money to facilitate the business activity through the use of government grants related to assets.
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