The paper evaluates the impact of the tax credit for investments in Southern Italy (Law 28 December 2015 n. 208) in the period 2016-2020. The measure belongs to the so-called 'large regimes', for which the European legislation on State aid requires an effectiveness assessment, conducted on the basis of a specific Evaluation Plan presented by the national authorities to the European Commission. The paper considers only limited-liability companies, the only ones for which data were made available, recipients of over 80 percent of the total tax benefits granted.
The results indicate that the measure was effective in increasing firm tangible assets, credit granted and employment, while it had no appreciable effect on labor productivity. The positive effects were concentrated among smaller enterprises. The increase in the tax credit introduced in the Special Economic Zones did not produce any additional stimulus compared to the tax credit in its basic version.
