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Subsidies for innovative start-ups and firm entry
[The effects of entry on incumbent innovation and productivity]

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  • Antonio Accetturo

Abstract

We provide a counterfactual evaluation of a policy implemented by two Italian regional governments (the autonomous provinces of Trento and Bolzano) to subsidize the entry of new and technologically advanced companies. Using a regression discontinuity design, we show that the subsidies were effective in stimulating the entry of new firms. The policy was able to increase the probability to create a new company by 30–40% points; the probability to create a firm for non-treated applicants averaged around 50%. We also analyze the economic impact of the program. Our estimates show that the policy did not raise (in the first 4 years) the innovation potential of treated firms (as measured by patenting activity); the value added generated by the policy in the first 3 years is equal to 3 million euros (the total amount of subsidies is 8 million).

Suggested Citation

  • Antonio Accetturo, 2022. "Subsidies for innovative start-ups and firm entry [The effects of entry on incumbent innovation and productivity]," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 31(5), pages 1202-1222.
    • Handle: RePEc:oup:indcch:v:31:y:2022:i:5:p:1202-1222.
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    File URL: http://hdl.handle.net/10.1093/icc/dtac014
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    Cited by:

    1. 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).

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