Industrial policy, innovative entrepreneurship, and the human capital of founders

Luca Grilli, Boris Mrkajic and Emanuele Giraudo
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Boris Mrkajic: Department of Management, Economics and Industrial Engineering
Emanuele Giraudo: Department of Management, Economics and Industrial Engineering

Small Business Economics, 2023, vol. 60, issue 2, No 14, 707-728

Abstract: Abstract Prior research shows that entrepreneurship enhances economic development. However, it is becoming increasingly evident that it is not the number of new startups that matter but rather their quality. This study investigates the effect of a comprehensive industrial policy intervention targeting innovative startups, i.e., the Italian Startup Act, on the composition of innovative entrepreneurs in terms of their human capital endowment. By decomposing the impact of lowering entry and growth barriers and by comparing the “before” and the “after” of the reform, we explore if the industrial policy has modified the composition of innovative entrepreneurs in terms of their human capital characteristics. The findings indicate that the reform, and in particular lowering growth barriers, was particularly able to push individuals with a relatively higher level of industry-specific, managerial, and entrepreneurial experience towards the creation of a new innovative venture. Overall, we show that a policy reform that decreases barriers to innovative entrepreneurship may attract entrepreneurs endowed with greater specific human capital than what occurred before the reform.

Keywords: Industrial policy; Startup Act; Innovative entrepreneurship; Human capital; Innovation (search for similar items in EconPapers)
JEL-codes: D02 L26 L52 O38 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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DOI: 10.1007/s11187-022-00611-y

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