The impact of startup subsidies on survival, growth, and stakeholder value

Yolanda Fuertes-Callén, Beatriz Cuéllar-Fernández and Adriana Serrano-Magdalena

Journal of Small Business Management, 2025, vol. 63, issue 4, 1437-1465

Abstract: Although the effects of subsidies on the survival, financial performance, and behavioral changes of startups have been extensively studied, their influence on economic value creation and distribution to stakeholders remains underexplored. To address this gap and mitigate publication bias, we examined the entire number of subsidies received by all Spanish startups at founding (51,495) over a decade, analyzing their outcomes 5 years after inception. We employed statistical matching methods controlling for the startups’ founding conditions. The study revealed that subsidies have a positive impact on startups’ growth and provide a significantly higher likelihood of survival; however, no significant effect on profitability was observed. Receiving a subsidy should be considered alongside other factors in explanatory models of business survival. Subsidies are associated with increased economic value creation and distribution to employees but not to the government through taxes. These findings underscore the importance of understanding the long-term consequences of subsidies on stakeholders.

Date: 2025
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DOI: 10.1080/00472778.2024.2387601

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