This paper studies the economic impact of foreign aid on Italian firms. In particular, I study the different effects of three main forms of aid: The Export-Import Bank loans, the Marshall Plan ERP ‘dollars’ loans, and the Marshall Plan ERP ‘lire’ loans. In all programs, the U.S. sent technologically advanced machinery to allow a modernisation of the technology of Italian firms, but the conditions of such loans differed. This paper tests how crucial such different features have been for the effectiveness of firm reconstruction aid. By creating a new data set on recipient firms and linking it to a large comprehensive firm-level dataset (Imita.db), I compare the effects on the performance of firms. I find that the Export-Import Bank loan raised the long-run profitability of firms, but that firms who received more flexible forms of Marshall Plan aid (‘ERP-lire’) raised their performance much more than Export- Import Bank recipients. Recipients who only received funds provided with long delays (‘ERP-dollars’) did not benefit from them. This evidence suggests that rather than receiving foreign aid per se, the most crucial features of reconstruction aid in Italy have been obtaining the requested goods on time and adjusting requests to receive the most needed productive goods.

It’s not About the Money: New evidence on U.S. reconstruction aid in Italy, 1947-1968

Marco Martinez
In corso di stampa

Abstract

This paper studies the economic impact of foreign aid on Italian firms. In particular, I study the different effects of three main forms of aid: The Export-Import Bank loans, the Marshall Plan ERP ‘dollars’ loans, and the Marshall Plan ERP ‘lire’ loans. In all programs, the U.S. sent technologically advanced machinery to allow a modernisation of the technology of Italian firms, but the conditions of such loans differed. This paper tests how crucial such different features have been for the effectiveness of firm reconstruction aid. By creating a new data set on recipient firms and linking it to a large comprehensive firm-level dataset (Imita.db), I compare the effects on the performance of firms. I find that the Export-Import Bank loan raised the long-run profitability of firms, but that firms who received more flexible forms of Marshall Plan aid (‘ERP-lire’) raised their performance much more than Export- Import Bank recipients. Recipients who only received funds provided with long delays (‘ERP-dollars’) did not benefit from them. This evidence suggests that rather than receiving foreign aid per se, the most crucial features of reconstruction aid in Italy have been obtaining the requested goods on time and adjusting requests to receive the most needed productive goods.
In corso di stampa
File in questo prodotto:
File Dimensione Formato  
paper_EcHR_revision_V4.pdf

solo utenti autorizzati

Tipologia: Documento in Pre-print/Submitted manuscript
Licenza: Copyright dell'editore
Dimensione 4.02 MB
Formato Adobe PDF
4.02 MB Adobe PDF   Visualizza/Apri   Richiedi una copia

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11382/564992
 Attenzione

Attenzione! I dati visualizzati non sono stati sottoposti a validazione da parte dell'ateneo

Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus ND
social impact