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Supporting innovative entrepreneurship: an evaluation of the Italian "Start-up Act"

Francesco Manaresi (), Carlo Menon () and Pietro Santoleri

No 163, Mo.Fi.R. Working Papers from Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences

Abstract: The role of innovative start-ups in contributing to aggregate economic dynamism has attracted increased attention in recent years. While this has translated into several public policies explicitly targeting them, there is little evidence on their e ectiveness. This paper provides a comprehensive evaluation of the "Start-up Act", a policy intervention aimed at supporting innovative start-ups in Italy. We construct a unique database encompassing detailed information on firm balance-sheets, employment, firm demographics, patents and bank-firm relationships for all Italian start-ups. We use conditional difference-in-differences and instrumental variable strategies to evaluate the impact of the "Start-up Act" on firm performance. Results show that the policy induces a significant increase in several firm outcomes whereas no effect is detected in patenting propensity and survival chances. We also document that the policy alleviates nancial frictions characterizing innovative start-ups through the provision of tax credits for equity and a public guarantee scheme which, respectively, trigger an increase in the probability of receiving VC and accessing bank credit.

Keywords: Start-ups; Entrepreneurship policy; Policy Evaluation; Firm performance (search for similar items in EconPapers)
JEL-codes: M13 L25 L53 D04 (search for similar items in EconPapers)
Pages: 33
Date: 2020-07
New Economics Papers: this item is included in nep-cse, nep-ent, nep-eur, nep-fdg, nep-ino, nep-sbm and nep-tid
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