• European state aids
• industry 4.0
• Italian economy
• Nuova Sabatini
• policy evaluation
• public policy
• technical change
• technological diffusion

Investments in new Industry 4.0 technologies can generate substantial gains for firms. The aim of this work is to evaluate the nature and extent of such gains, specifically on employment, wages and productivity growth. We exploit data on the “Nuova Sabatini” policy scheme - an important policy measure adopted in Italy in past years - and employ a Difference-in-Differences (DiD) methodology to estimate the effects of these technologies on adopters relative to two different control groups: the first one is composed of firms that applied to the scheme but whose funding was revoked; the second is obtained through statistical matching.
The analysis is based on three main data sources: the Italian “National Register of State Aids” (NRA), confidential data from the Ministry of Economic Development (MiSE), and financial data from the Italian business register obtained through InfoCamere. In assessing the role of Industry 4.0 technologies on firm performance, we find overall positive effects on employment, wages, and productivity, as well as on assets (the main target of the policy). The results contribute, on the one hand, to a better understanding of the gains from new digital technologies, and, on the other, to the ongoing debate on State Aids and European industrial policy.