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Intellectual property is related to industrial property and copyright, and in both cases is considered to be an indicator of innovation and development. The study of innovation subsidies given to innovative firms has been widely reviewed in developed economies, but there is very little empirical evidence for developing countries. And this study looks to provide new insights into developing countries, which motivates the originality of this paper. The goal of this study was to measure the impact on income of a group of subsidies that support innovative business processes in a developing country, Chile. Our database consisted of a panel with 1,523 Chilean firms during two periods: 2007 and 2009. Difference in difference was applied to the data panel and selection bias was decreased through propensity score matching. Results indicate a significant and positive effect of the group of innovative subsidies on the income of treated firms.

•We analyze how mining windfalls crowd out property taxes.•We pursue the causal effect derived from subnational crowding out.•Mining windfalls crowd out property tax collection in high provision municipalities.•On average, a US$1.0 increase in mining windfalls crowds out US$1.0 in property taxes.•Results call for policies that disincentive the SCO according to local fiscal capacity.