This paper aims at contributing to the empirical literature about the impact of R&D subsidies on firm performance by providing recent micro-evidence from Italy. We evaluate grant effects on the innovation and market results of firms selected for funding in the short and medium run using a counterfactual approach. Results show that the innovative performance improves only temporarily and no significant differences between grant recipients and non-recipients emerge as far as labour productivity and sales growth are concerned. Rather, a growth in qualified employment is observed among SMEs.
Keywords: bias-corrected matching, firm performances, research and development (R&D), subsidies