1 The determinants of firm participation in public incentive programmes for outward internationalisation Mariasole Bannò Università degli Studi di Brescia Department of Mechanical and Industrial Engineering Via Branze, 38 - 25123 Brescia (Italy) mariasole.banno@unibs.it Tel. +39.030.371.5563 Fax +39.030.370.2448 Francesca Sgobbi Università degli Studi di Brescia Department of Mechanical and Industrial Engineering Via Branze, 38 - 25123 Brescia (Italy) francesca.sgobbi@unibs.it Tel. +39.030.371.5563 Fax +39.030.370.2448 Abstract: Based on an analysis of the behaviour of firms applying for outward FDI (foreign direct investment) incentives, this study explores firm participation processes in policy programmes. This paper identifies and empirically tests the determinants of self-selection as firms apply for outward FDI incentives while controlling for the guidelines followed by the agencies that allocate incentives. Using firm-level data, this paper shows that the opportunity costs of applying, the financial constraints and the riskiness of FDI projects significantly affect firm be- haviour in applying for public incentives, thereby suggesting the existence of self- selection mechanisms among eligible firms. Key words: public policy, process evaluation, outward FDI.