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Supporting innovative entrepreneurship: an evaluation of the Italian “Start-up Act”
[The effects of entry on incumbent innovation and productivity]

Author

Listed:
  • Francesco Manaresi
  • Carlo Menon
  • Pietro Santoleri

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 effectiveness. This article 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 financial 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.

Suggested Citation

  • Francesco Manaresi & Carlo Menon & Pietro Santoleri, 2021. "Supporting innovative entrepreneurship: an evaluation of the Italian “Start-up Act” [The effects of entry on incumbent innovation and productivity]," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 30(6), pages 1591-1614.
    • Handle: RePEc:oup:indcch:v:30:y:2021:i:6:p:1591-1614.
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    File URL: http://hdl.handle.net/10.1093/icc/dtab033
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    Cited by:

    1. Mellace, Giovanni & Ventura, Marco, 2023. "The short-run effects of public incentives for innovation in Italy," Economic Modelling, Elsevier, vol. 120(C).
    2. Raphaël CHIAPPINI & Sophie POMMET, 2023. "The impact of public support for innovation on SME performance and efficiency," Bordeaux Economics Working Papers 2023-06, Bordeaux School of Economics (BSE).
    3. Santoleri, Pietro & Russo, Emanuele, 2025. "Spurring subsidy entrepreneurs," Research Policy, Elsevier, vol. 54(1).
    4. Giuseppe Albanese & Raffaello Bronzini, 2025. "The impact of public incentives on the birth of innovative start-ups," Questioni di Economia e Finanza (Occasional Papers) 915, Bank of Italy, Economic Research and International Relations Area.
    5. Maria Giulia Cassinis & Andrea Cintolesi & Sara Formai & Andrea Locatelli & Francesco Manaresi & Elisabetta Manzoli & Giulio Papini & Fabio Parlapiano & Pasquale Recchia & Simone ZuccolalÃ, 2025. "Innovative firms unveiled: economic and financial insights from Italian start-ups," Questioni di Economia e Finanza (Occasional Papers) 967, Bank of Italy, Economic Research and International Relations Area.
    6. Mellace, Giovanni & Ventura, Marco, 2019. "Intended and unintended effects of public incentives for innovation. Quasi-experimental evidence from Italy," Discussion Papers on Economics 9/2019, University of Southern Denmark, Department of Economics.

    More about this item

    JEL classification:

    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L53 - Industrial Organization - - Regulation and Industrial Policy - - - Enterprise Policy
    • D04 - Microeconomics - - General - - - Microeconomic Policy: Formulation; Implementation; Evaluation

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