An Evaluation of the Policies on Repayment of Government’s Trade Debt in Italy

Since 2012 the Italian Government has taken several steps to repay its commercial debts. Using a composite dataset, we evaluate the effects of these policies on the financial performance of a representative sample of Italian firms. We distinguish between the firms that were beneficiaries of these repayments, those that were not repaid, though they had a legitimate claim, and those that had no commercial ties with the general government. We find that receiving money had a significant positive impact on firms’ financial position.