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The Life Duration of Small Firms Born Within a Start-up Programme: Evidence from Italy

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  • Alfredo Del Monte
  • Domenico Scalera

Abstract

DEL MONTE A. and SCALERA D. (2001) The life duration of small firms born within a start-up programme: evidence from italy, Reg Studies 35, 11-21. We argue in this paper that the success of a subsidy programme should not be evaluated by comparing the survival rates of subsidized and non subsidized firms, since the purpose of subsidies is to offset a gap with firms that do not need subsidies. Secondly, we seek to identify the main factors aVecting the death probability of small firms born within a start-up programme. To this end, we conduct an empirical investigation of the firms supported by Law 44 in Italy between 1988 and 1997, finding that the amount of capital invested has a negative impact on life duration, while the capital/ labour ratio and the amount of subsidy exert a positive influuence. The main result is the unusual, negative relationship between size and survival, which we interpret in terms of the bias induced by subsidies in favour of larger and Riskier firms. DEL MONTE A. et SCALERA D. (2001) La vie des petites entreprises nees au sein d'un programme en faveur de la creation d'enteprise: des preuves provenant de l'Italie, Reg Studies 35, 11-21. Cet article cherche a affirmer que l'on ne devrait pas evaluer le succes d'un programme de subventions a partir d'une comparaison des taux de survie des entreprises subventionees ou non subventionees, puisque les subventions ont pour but de reduire l'ecart par rapport aux entreprises qui n'en ont pas besoin. En deuxieme, on cherche a identifier les facteurs cle qui influent sur la mortalite des petites enterprises nees suite au lancement d'un programme en faveur de la creation d'entreprise. D'ou l'enquete sur les entreprises subventionees dans le cadre de la 44 en Italie entre 1988 et 1997. Il s'avere que le montant du capital initial investi influe de facon negative sur la vie de l'entreprise, tandis que le rapport capitaltravail et la subvention sont plutot positifs. Il en resulte principalement un rapport inattendu et negatif entre la taille et la survie, considere comme le parti pris provoque par les subventions octroyees en faveur des enterprises plus grandes et plus aleatoires. DEL MONTE A. und SCALERA D. (2001) Die Lebensdauer kleiner Firmen, die ihre Entstehung einem Betriebsgrundungsprogramm verdanken: Beweise aus Italien, Reg Studies 35, 11-21. Dieser Aufsatz vertritt die These, dass der Erfolg eines Subventionsprogramms nicht durch Vergleich der Uberlebensraten subventionierter und nicht subventionierter Betriebe bewertet werden sollte, da der Zweck der Unterstutzung das Wettmachen eines Abstandes ist, der zwischen ersteren und solchen Betrieben besteht, die keine Subventionen benotigen. Ausserdem wird versucht, die Hauptfaktoren zu identifizieren, welche sich auf die Wahrscheinlichtkeit des Eingehens kleiner Betriebe auswirken, die ihre Entstehung einem Betriebsgrundungsprogramm verdanken. Deswegen wird eine empirische Untersuchung der im Zeitraum 1988-1997 durch das Gesetz 44 in Italien unterstutzter Betriebe durchgefuhrt, mit dem Befund, dass die Hohe des investierten Kapitals eine negative Auswirkung auf die Lebensdauer ausubt, wahrend das Verhaltnis von Kapital/Arbeitskraften und die Hohe der Subventionierung einen positiven Einfluss hat. Das Hauptergebnis ist die ungewohnliche, negative Beziehung zwischen Umfang und Uberleben, die als Voreingenommenheit interpretiert wird, deren Ursache in der grossere und riskantere Betriebe bevorzugenden Subventionszuteilung zu suchen ist.

Suggested Citation

  • Alfredo Del Monte & Domenico Scalera, 2001. "The Life Duration of Small Firms Born Within a Start-up Programme: Evidence from Italy," Regional Studies, Taylor & Francis Journals, vol. 35(1), pages 11-21.
  • Handle: RePEc:taf:regstd:v:35:y:2001:i:1:p:11-21
    DOI: 10.1080/00343400120025646
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    References listed on IDEAS

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    1. Domenico Scalera & Alberto Zazzaro, 2002. "Subsidies, Negotiated Planning and Public Enterprise in the Italian Mezzogiorno," QA - Rivista dell'Associazione Rossi-Doria, Associazione Rossi Doria, issue 3, November.
    2. José María Millán & Emilio Congregado & Concepción Román, 2010. "Determinants of Self-Employment Dynamics and their Implications on Entrepreneurial Policy Effectiveness," Lecturas de Economía, Universidad de Antioquia, Departamento de Economía, issue 72, pages 45-76.
    3. Greene, Francis, 2012. "Should the focus of publicly provided small business assistance be on start-ups or growth businesses?," Occasional Papers 12/2, Ministry of Economic Development, New Zealand.
    4. Stjepan Srhoj & Bruno Škrinjarić & Sonja Radas, 2021. "Bidding against the odds? The impact evaluation of grants for young micro and small firms during the recession," Small Business Economics, Springer, vol. 56(1), pages 83-103, January.
    5. Kevin F Mole & George Bramley, 2006. "Making Policy Choices in Nonfinancial Business Support: An International Comparison," Environment and Planning C, , vol. 24(6), pages 885-908, December.
    6. Annamaria Nifo & Gaetano Vecchione, 2015. "A quali imprese vanno i sussidi pubblici? evidenza dall?industria manifatturiera italiana," RIVISTA DI ECONOMIA E STATISTICA DEL TERRITORIO, FrancoAngeli Editore, vol. 2015(3), pages 5-28.
    7. Colombo, Massimo G. & Delmastro, Marco & Grilli, Luca, 2004. "Entrepreneurs' human capital and the start-up size of new technology-based firms," International Journal of Industrial Organization, Elsevier, vol. 22(8-9), pages 1183-1211, November.
    8. Grazia Rapisarda & Eleonora Patacchini & University of Southampton, 2003. "A Study of the Effectiveness of Credit Subsidies: Evidence from a Panel of Italian Firms," Economics Series Working Papers 153, University of Oxford, Department of Economics.
    9. Guido Pellegrini & Teo Muccigrosso, 2017. "Do subsidized new firms survive longer? Evidence from a counterfactual approach," Regional Studies, Taylor & Francis Journals, vol. 51(10), pages 1483-1493, October.
    10. José Millán & Emilio Congregado & Concepción Román, 2012. "Determinants of self-employment survival in Europe," Small Business Economics, Springer, vol. 38(2), pages 231-258, February.
    11. Colombo, Massimo G. & Grilli, Luca, 2005. "Start-up size: The role of external financing," Economics Letters, Elsevier, vol. 88(2), pages 243-250, August.
    12. Destefanis, Sergio & Storti, Giuseppe, 2005. "Evaluating Business Incentives Through DEA. An Analysis on Capitalia Firm Data," MPRA Paper 62336, University Library of Munich, Germany.
    13. Paul Plummer & Michael Taylor, 2003. "Theory and Praxis in Economic Geography: ‘Enterprising’ and Local Growth in a Global Economy," Environment and Planning C, , vol. 21(5), pages 633-649, October.
    14. Sandra M. Sánchez‐Cañizares & L. Javier Cabeza‐Ramírez & M. Dolores Guerrero‐Baena, 2020. "Evaluation of self‐employment support policies using survival analysis. The discounted flat rate in Andalusia (Spain)," Papers in Regional Science, Wiley Blackwell, vol. 99(5), pages 1389-1411, October.
    15. Román, Concepción & Congregado, Emilio & Millán, José María, 2013. "Start-up incentives: Entrepreneurship policy or active labour market programme?," Journal of Business Venturing, Elsevier, vol. 28(1), pages 151-175.

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