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Public Funding of Entrepreneurship: a Case Study on Start-ups in Romania

Author

Listed:
  • Bogdan Glavan
  • Flavia Anghel
  • Karl-Friedrich Israel

    (GRANEM - Groupe de Recherche Angevin en Economie et Management - UA - Université d'Angers - Institut Agro Rennes Angers - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement, UCO - Université Catholique de l'Ouest, COGI - Comportements, Organisations et Gouvernance des Institutions - UCO - Université Catholique de l'Ouest)

Abstract

Governments attempt to stimulate entrepreneurship and innovation in various ways and with different results. In 2015 the Romanian government began to subsidize the creation of start-ups, following a general policy of the European Union. We evaluate the effects of the Romania Start-up Program, which offered subsidies for hundreds of entrepreneurs in a large variety of economic sectors. We statistically compare subsidized and unsubsidized start-ups, by calculating the Kaplan-Meier estimators of survival rates in both groups over a 5-year period. We show that subsidized start-ups have a significantly lower survival rate than non-subsidized start-ups after 4 to 5 years. Moreover, the level of employment in subsidized start-ups decreased drastically compared to their non-subsidized counterparts. Examining the survival rates of subsidized start-ups created with/without additional private investment, we find that start-ups with "skin in the game" have a higher survival rate, although we cannot draw statistically significant conclusions.

Suggested Citation

  • Bogdan Glavan & Flavia Anghel & Karl-Friedrich Israel, 2025. "Public Funding of Entrepreneurship: a Case Study on Start-ups in Romania," Post-Print hal-05778456, HAL.
    • Handle: RePEc:hal:journl:hal-05778456
    DOI: 10.2478/zireb-2025-0016
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