Do business incubators really enhance entrepreneurial growth? Evidence from a large sample of innovative Italian start-ups. (April 2019)

• Record Type: Journal Article
• Authors: Lukeš, Martin; Longo, Maria Cristina; Zouhar, Jan
• Is Part Of: Technovation. Volume 82/83(2019)
• Page Start: 25
• Page End: 34
• Publication Date: 2019-04
• Subjects: Business incubator -- Innovative start-up -- Performance -- Italy -- Growth -- Public policy; Technological innovations -- Periodicals; Industrial management -- Periodicals; Innovations -- Périodiques; Gestion d'entreprise -- Périodiques; Electronic journals; 658.57
• DOI: 10.1016/j.technovation.2018.07.008
• Languages: English
• ISSNs: 0166-4972

Abstract

Abstract: Innovative start-ups are often considered to be a key source of innovation and job creation. As such they are the subject of several types of supportive public policies. This study examines the short-term and long-term effects of business incubators on the performance of innovative start-ups in terms of sales revenues and job creation. A large sample of N = 2544 innovative Italian start-ups, of which 606 were incubated, was followed over a period of up to six years. Tobit and Poisson regressions and propensity-score matching analyses point towards a significant negative effect of incubator tenancy on sales revenues and no significant effect of incubation on job creation. Findings also suggest that the initially negative effect of incubation on sales revenues turns into a positive effect in the long term. The effects of incubator characteristics, in terms of ownership, certification, and size on the growth of tenant start-ups were further analysed, but these effects were found to be negligible. The study contributes to the literature on the evidence-based evaluation of business incubation performance. It suggests that public policy makers should lower their expectations regarding the numbers of new jobs created by business incubation support. Highlights: Incubator tenancy had a negative short-term effect on start-ups' sales revenue. Incubation seems to speed up sales revenue growth in the long run. Incubator tenancy had a negligible effect on start-ups' job creation. Evidence justifying public spending on business incubators was not found.