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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. Mata, Jose & Portugal, Pedro, 1994. "Life Duration of New Firms," Journal of Industrial Economics, Wiley Blackwell, vol. 42(3), pages 227-245, September.
    2. Kiefer, Nicholas M, 1988. "Economic Duration Data and Hazard Functions," Journal of Economic Literature, American Economic Association, vol. 26(2), pages 646-679, June.
    3. Jovanovic, Boyan, 1982. "Selection and the Evolution of Industry," Econometrica, Econometric Society, vol. 50(3), pages 649-670, May.
    4. Harhoff, Dietmar & Stahl, Konrad & Woywode, Michael, 1998. "Legal Form, Growth and Exit of West German Firms--Empirical Results for Manufacturing, Construction, Trade and Service Industries," Journal of Industrial Economics, Wiley Blackwell, vol. 46(4), pages 453-488, December.
    5. Wagner, Joachim, 1994. "The Post-entry Performance of New Small Firms in German Manufacturing Industries," Journal of Industrial Economics, Wiley Blackwell, vol. 42(2), pages 141-154, June.
    6. Anna Giunta & Domenico Scalera, 1997. "Sopravvivenza e mortalità delle piccole imprese meridionali: un'applicazione dei modelli di durata," L'industria, Società editrice il Mulino, issue 3, pages 485-504.
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    Cited by:

    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. 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.
    5. Anabela Santos & Paulo Neto & Maria Manuel Serrano, 2016. "A long-term mortality analysis of subsidized firms in rural areas: an empirical study in the Portuguese Alentejo region," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 6(1), pages 125-151, April.
    6. Colombo, Massimo G. & Grilli, Luca, 2005. "Start-up size: The role of external financing," Economics Letters, Elsevier, vol. 88(2), pages 243-250, August.
    7. Destefanis, Sergio & Storti, Giuseppe, 2005. "Evaluating Business Incentives Through DEA. An Analysis on Capitalia Firm Data," MPRA Paper 62336, University Library of Munich, Germany.
    8. 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.
    9. 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.
    10. Pablo Astorga Junquera, 2017. "Real Wages and Skill Premiums during Economic Development in Latin America," Economics Series Working Papers 153, University of Oxford, Department of Economics.

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