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Assessing the Italian Innovative Start-Ups Performance with a Composite Index

Author

Listed:
  • Gianni Onesti

    (Department of Neuroscience, Imaging and Clinical Sciences, University G. d’Annunzio of Chieti-Pescara, Via Luigi Polacchi 11, 66100 Chieti, Italy)

  • Eleonora Monaco

    (Department of Management, University of Bologna, Via Capo di Lucca, 34, 40126 Bologna, Italy
    Research Centre in Management and Economics (CEGE), Católica Porto Business School, Universidade Católica Portuguesa, Rua de Diogo Botelho, 1327, 4169-005 Porto, Portugal)

  • Riccardo Palumbo

    (Department of Neuroscience, Imaging and Clinical Sciences, University G. d’Annunzio of Chieti-Pescara, Via Luigi Polacchi 11, 66100 Chieti, Italy
    Center for Advanced Studies and Technologies “CAST”, University G. d’Annunzio of Chieti-Pescara, Via Luigi Polacchi 11, 66100 Chieti, Italy)

Abstract

This paper aims to assess the profitability and employees’ productivity of Italian innovative start-ups with a new composite index: the Start-ups Performance score (SP-score). In recent years, the Italian government has made several efforts to foster the economy, establishment, and growth of start-ups. Specifically, the issuing of the Italian Start-up Act in 2012 offers a unique opportunity to examine the Italian setting, given the special conditions that the government granted to the start-ups. The latter obtain generic benefits, tax reductions and hiring facilitations if they meet specific criteria granting the status (label) of “innovative” by law. Based on a sample of Italian start-ups firms (ISPs) and financial statement data for the period 2016–2020, we test whether the performance of the Italian start-ups which are granted the status of “innovative” is higher compared to start-ups without the mentioned status (NISPs). We measure the firm’s performance by building a composite index which synthesizes both profitability and employees’ productivity (controlling for the firms’ size), and find that the ISPs report higher SP-score compared to the NISPs. In addition, we examine whether the SP-score is higher (or lower) among Innovative start-ups located in different regional areas. The derivation of the composite indicator (SP-score) allows a clear and effective evaluation of several characteristics, permitting a more comprehensive understanding of the data that support the strategic choices of management and localization entrepreneurship policies. In addition, our study highlights a certain homogeneity of innovative start-ups’ performance among the Italian territories, which overcomes the classic dualistic division between Northern and Southern regions.

Suggested Citation

  • Gianni Onesti & Eleonora Monaco & Riccardo Palumbo, 2022. "Assessing the Italian Innovative Start-Ups Performance with a Composite Index," Administrative Sciences, MDPI, vol. 12(4), pages 1-18, December.
    • Handle: RePEc:gam:jadmsc:v:12:y:2022:i:4:p:189-:d:1000459
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