Industry-research co-operation within and across regional boundaries. What does innovation policy add?

The paper aims to show how regional policy-makers can stimulate firms’ co-operation with research organizations by granting an R&D subsidy. Using an original dataset for the Italian region of Emilia-Romagna, propensity score matching is first applied to identify the impact of the subsidy received.Ageneralized propensity score technique is then employed to investigate the effect of an increasing amount of support. The firm’s co-operation is policy sensitive. The award of a subsidy to regional firms affects their intra-regional more than their extra-regional co-operation.The propensity toward the latter appears subject to a monetary effect and is influenced by the amount of public funding received providing the subsidy overcomes a minimum threshold.