Do subsidized new firms survive longer? Evidence from a counterfactual approach

Abstract

Do subsidized new firms survive longer? Evidence from a counterfactual approach. Regional Studies. This study provides a\ud statistically robust evaluation of the impact of capital subsidies on the survival of start-ups in Italy. The analysis considers the\ud subsidies provided by the main Italian regional policy, Law 488/1992, during 1996–2009. By exploiting an unusual\ud characteristic of the L. 488 selection process, a quasi-experimental design with high internal validity – the regression\ud discontinuity design – is applied for the first time to the survival analysis. The results show a lower default risk in\ud subsidized start-ups. These findings contradict the view that start-ups receiving L. 488 assistance simply used the grant\ud funding to delay exit

Bidding against the odds? The impact evaluation of grants for young micro and small firms during the recession

“…Our major finding is that, although the grants were very small, they were still able to affect survival (in 2016 after the recession was over), and access to external finance. This positive effect on survival is similar to the findings of Pellegrini and Muccigrosso (2017), Crepon and Duguet (2003) and Almus and Prantl (2002), although their positive effect is found in a different setting than ours. Unlike Pfeiffer and Reize 2000, we do not find any evidence of the negative "cash and carry" effect of grants on firm survival.…”

“…Lerner (1999) evaluates the SBIC program in the United States and finds a positive impact on firm growth. Pellegrini and Muccigrosso (2017) show that Italian regional policy (Law 488/1992) in the form of a capital subsidy had a positive effect on the survival of start-ups during the 1996-2009 period. Del Monte and Scalera (2001) examine the effect of Law 44 in Italy during the 1988-1997 period and find a negative relationship between the amount of capital invested and firms' life duration, while the capital/labor ratio and the amount of subsidy are positively related.…”

“…Furthermore, Pellegrini and Muccigrosso (2017) note very few impact studies evaluating the effect of public funds for young firms on firm survival-a gap also addressed in this research. In addition, while many papers evaluate the impact of research and development (R&D) grants (for example, Dimos & Pugh, 2016;Howell, 2017), few papers evaluate the impact of matching grants for business development on firm performance (for example, López- Acevedo & Tan, 2011;Wren & Storey, 2002;McKenzie, Assaf & Cusolito, 2017).…”

“…Burger and Rojec (2018) in Slovenia find anti-crisis measures to have a positive impact only on the number of employees, but not on other firm performance measures. Notable impact analyses of grants for young firms have been conducted in the United States (Lerner, 1999), Germany (Almus & Prantl, 2002;Cantner & Kösters, 2012;Czarnitzki & Delanote, 2015;Pfeiffer & Reize, 2000), Belgium (Decramer & Vanormelingen, 2016), Italy (Colombo, Giannangeli & Grilli, 2013;Del Monte & Scalera, 2001;Pellegrini & Muccigrosso, 2017), France (Crepon & Duguet, 2003;Désiage, Duhautois & Redor, 2010), Spain (Busom, 2000;González & Pazó, 2008;Huergo & Trenado, 2010;Rojas & Huergo, 2016;Segarra-Biasco & Teruel, 2016), Finland (Koski & Pajarinen, 2013) and Argentina (Butler, Galassi & Ruffo, 2016). Most papers (e.g.…”

Assessing the microeconomic effects of public subsidies on the performance of firms in the czech food processing industry: A counterfactual impact evaluation

“…Regardless of increasing emphasis on the counterfactual impact evaluation of public policies (e.g., Dvouletý, ; Dvouletý & Lukeš, ; Huergo & Moreno, ; Pellegrini & Muccigrosso, ; Porro & Salis, ), there are not many publications in outstanding agri‐food economics journals on this topic and, moreover, they are, for the most part, geared toward agriculture rather than toward the food industry (e.g., Anderson, Jensen, Nelgen, & Strutt, ; Esposti & Sotte, ; Läpple & Hennessy, ; Mendola, ; Petrick & Zier, ; Wang, ). In fact, many studies conducting impact evaluations have been published in conference proceedings or as working/seminar papers (e.g., Bartova & Hurnakova, ; Fan, ; Kirchweger & Kantelhardt, ; Ratinger, Medonos, & Hruška, ).…”