The role of industry variety in the creation of innovative start-ups in Italy

Roberto Antonietti and Francesca Gambarotto ()

Small Business Economics, 2020, vol. 54, issue 2, No 12, 573 pages

Abstract: Abstract This paper aims to ascertain whether related and unrelated industry variety affects the creation of innovative as opposed to other start-ups in Italian local labor market areas. The analysis combines elements from the knowledge spillover theory of entrepreneurship, the recombinant growth approach, and evolutionary economic geography. Using data on Italian innovative start-ups created between 2012 and 2015, and on firms newly registered with the Italian Chambers of Commerce, and applying appropriate count data models, our estimates show that innovative start-ups are more frequently created in areas where unrelated variety is higher. This is because innovative start-ups find more opportunities to recombine different pieces of knowledge or maximize their portfolio of demand opportunities, in such a setting, whereas a higher related variety stimulates the creation of other types of new start-up, for which it is easier to combine similar, complementary knowledge sources. We also find that half of the effect of related and unrelated variety comes from the localization of (innovative) start-ups in large urban areas.

Keywords: New start-ups; Innovative start-ups; Related variety; Unrelated variety (search for similar items in EconPapers)
JEL-codes: L26 M13 O33 R11 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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DOI: 10.1007/s11187-018-0034-4

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