• difference-in-differences
• policy evaluation
• r&d subsidies
• staggered treatment timing
• sustainable growth

Societies today are called to deal with an astonishing number of challenges, many of which global in scope, such as adverse climate change (Mowery et al., 2010). Although innovation on its own is not sufficient to overcome them, it is a necessary part of any solution (Foray et al., 2012). However, economists disagree on how the State should act to foster innovation. Among the many options available to policymakers, there is the public funding of private R&D through the provision of subsidies, whose effectiveness is hotly debated.
The present dissertation aims to evaluate the effectiveness of an R&D subsidy program, called industria sostenibile (“sustainable industry”) and designed by the Italian Ministry of Economic Development. After a brief discussion of the theoretical and empirical background of innovation policy, and of the institutional setting of industria sostenibile, we apply the innovative DiD design with staggered treatment timing proposed by Callaway and Sant’Anna (2021). Our results show the program ineffectiveness in fostering additional “green” innovation. Therefore, such causal evidence questions the ability of diffusion-oriented innovation policies (Ergas, 1987) to meet current societal challenges.