Assessing the Italian Innovative Start-Ups Performance with a Composite Index

Gianni Onesti (), Eleonora Monaco and Riccardo Palumbo
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Gianni Onesti: Department of Neuroscience, Imaging and Clinical Sciences, University G. d’Annunzio of Chieti-Pescara, Via Luigi Polacchi 11, 66100 Chieti, Italy
Eleonora Monaco: Department of Management, University of Bologna, Via Capo di Lucca, 34, 40126 Bologna, Italy
Riccardo Palumbo: Department of Neuroscience, Imaging and Clinical Sciences, University G. d’Annunzio of Chieti-Pescara, Via Luigi Polacchi 11, 66100 Chieti, Italy

Administrative Sciences, 2022, vol. 12, issue 4, 1-18

Abstract: This paper aims to assess the profitability and employees’ productivity of Italian innovative start-ups with a new composite index: the Start-ups Performance score (SP-score). In recent years, the Italian government has made several efforts to foster the economy, establishment, and growth of start-ups. Specifically, the issuing of the Italian Start-up Act in 2012 offers a unique opportunity to examine the Italian setting, given the special conditions that the government granted to the start-ups. The latter obtain generic benefits, tax reductions and hiring facilitations if they meet specific criteria granting the status (label) of “innovative” by law. Based on a sample of Italian start-ups firms (ISPs) and financial statement data for the period 2016–2020, we test whether the performance of the Italian start-ups which are granted the status of “innovative” is higher compared to start-ups without the mentioned status (NISPs). We measure the firm’s performance by building a composite index which synthesizes both profitability and employees’ productivity (controlling for the firms’ size), and find that the ISPs report higher SP-score compared to the NISPs. In addition, we examine whether the SP-score is higher (or lower) among Innovative start-ups located in different regional areas. The derivation of the composite indicator (SP-score) allows a clear and effective evaluation of several characteristics, permitting a more comprehensive understanding of the data that support the strategic choices of management and localization entrepreneurship policies. In addition, our study highlights a certain homogeneity of innovative start-ups’ performance among the Italian territories, which overcomes the classic dualistic division between Northern and Southern regions.

Keywords: innovative start-ups; entrepreneurship; start-ups performance; composite indicators; financial statement analysis (search for similar items in EconPapers)
JEL-codes: L M M0 M1 M10 M11 M12 M14 M15 M16 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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