Measuring investment readiness: a tool for the evaluation of policies for social firms

This paper presents an organized system of indicators aimed at measuring investment readiness, applied experimentally in the context of the evaluation of the SEED2018 call. This measure, launched by the Compagnia di San Paolo (a bank foundation), aims to strengthen the social cooperatives, triggering processes of organizational and managerial renewal through a two-phase mechanism. The first one is devoted to an analysis of needs supported by a specialist consultant. The output is a renovation plan that is implemented in the second phase. This provides us with three subgroups among the applying companies: excluded firms, firms participating only in phase 1, and firms participating in phase 1 and 2. The 3 groups may be exploited for evaluation purposes. The outcome of the project is identified by the policy-maker in the concept of Investment readiness, and has been measured with a set of metrics collected through ex-ante and ex-post surveys. In this paper we will discuss the evaluation challenges connected to impact evaluation in the field of entrepreneurial coaching for operators of the third sector. We will propose the use of the concept of investment readiness to this aim and show how it can be operationalized through the calculation of a set of composite indicators. We will test the methodology, by applying it to the three subgroups of firms, used as non-experimental controls, with a dif-in-dif approach. Finally, we will regress the changes in investment readiness over a set of observable variables of the firm, including also balance sheet data. Unfortunately, the implementation of the first edition of the SEED call occurred in the middle of the period affected by the Covid pandemic, which caused in Italy huge operational restrictions. This may perturbate the values of the observed indicators and reduce the readability of the impact, in the presence of a small number of participating firms in this pilot edition. Nevertheless, we think that this analysis will carry fundamental insights on the possibility to apply the methodology in such a particular field.