Industrial Organization

Michele Cantarella (University of Helsinki)

  • Impact evaluation of start-up innovation policies: evidence from a natural experiment


    Abstract: Many countries around the world have developed policy packages aimed at supporting innovation among young firms. It is often difficult to assess the effectiveness of these policies as, due to self-selection, a firm might have been equally successful without the aid of these initiatives. In this paper we study the causal effect of one of these policies, the Italian Startup Act of 2012, setting up a scheme of benefits which young firms could access by registering as “innovative startup” on a voluntary basis, as long as certain prerequisites were met. We focus on the Italian region of Trentino Alto-Adige/Südtirol, whose linguistic divide serves as an ideal quasi-experimental setting. Firms whose CEOs have a surname of German origin are more likely not to register as startups, while no differences in terms of outcomes between with firms with Italian-named CEOs are to be noted during the years preceding the introduction of the policy. We exploit these asymmetries as an exogenous source of access to the benefit scheme. Our findings suggest that firms benefiting from the policy scheme do not perform any better than comparable firms with innovative qualities that have not sought startup status.

  • Home page: Michele Cantarella
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Geert Van Moer

Hanken School of Economics

geert.vanmoer at

Iivo Vehviläinen

Aalto University

iivo.vehvilainen at

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