Do Occupational Safety and Health Direct Investment Policies Affect Firm Survival?

Abstract Using a unique dataset provided by the Italian National Institute for Insurance against Accidents at Work (Inail), this study investigates whether Inail’s 2013 initiative—designed to promote fixed investments in safer assets—has an indirect impact on firm survival. By subsidizing investments aimed at replacing outdated machinery or automating manual processes, the policy plausibly fosters process innovation, which may enhance firms’ economic performance and, in turn, improve their survival prospects. To evaluate this effect, the identification strategy exploits the quasi-random assignment mechanism induced by the “Click Day” procedure—a time-based allocation system measured to the hundredths of a second. The empirical analysis combines an Intention-to-Treat (ITT) approach with Average Treatment Effect (ATE) estimates derived from Nearest-Neighbour and Propensity Score Matching techniques, to account for potential post-randomization selection bias. The findings indicate that the policy exerts a statistically significant positive effect on firm survival and resilience. A key policy implication is that broadening the occupational safety and health (OSH) policy mix to include not only regulatory enforcement (“sticks”) but also direct financial incentives (“carrots”), particularly targeted at small and medium-sized enterprises (SMEs), can enhance OSH standards and support firm-level economic performance from an industrial policy perspective.