A Control Group Study of Incubators’ Impact to Promote Firm Survival

Michael Schwartz

No 11/2010, IWH Discussion Papers from Halle Institute for Economic Research (IWH)

Abstract: It is widely unclear as to whether start-up firms supported by publicly-initiated incubator initiatives have higher survival rates than comparable start-up firms that have not received support by such initiatives. This paper contributes to the underlying discussion by performing an empirical analysis of the long-term survival of 371 incubator firms (after their graduation) from five German incubators and contrasting these results with the long-term survival of a control group of 371 comparable non-incubated firms. The analysis covers a 10-year time span. To account for the problem of selection bias, a nonparametric matching approach is applied to identify an appropriate control group. For neither of the five incubator locations we find statistically significant higher survival probabilities for firms located in incubators compared to firms located outside those incubator organizations. For three incubator locations the analysis even reveals statistically significant lower chances of survival for those start-ups having received support by an incubator. We therefore arrive at the conclusion that being located in an incubator - contrasting the widespread rhetoric of policy actors and incubator stakeholders - does not increase the chances of long-term business survival.

Keywords: business incubators; firm survival; control group; matching; survival analysis; technology policy; Technologiezentren; Gründerzentren; Kontrollgruppe; Matching; Überleben; Überlebenszeitanalyse (search for similar items in EconPapers)
JEL-codes: C41 L26 M13 O38 (search for similar items in EconPapers)
Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:iwhdps:iwh-11-10

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