IDEAS home Printed from https://ideas.repec.org/a/kap/sbusec/v60y2023i3d10.1007_s11187-022-00621-w.html
   My bibliography  Save this article

The impact of the COVID-19 pandemic and pandemic-related policies on new firm creation: an analysis of the Italian case

Author

Listed:
  • Evila Piva

    (Politecnico Di Milano)

  • Massimiliano Guerini

    (Politecnico Di Milano)

Abstract

This work contributes to disaster research by exploring the impact on new firm creation of the COVID-19 pandemic and the pandemic-related policies. We develop hypotheses on the individual and combined effects of pandemic severity and public policies aimed at controlling the spread of the disease (shutdown policies) or protecting the economy from its negative consequences (demand stimulus and firm support policies). Then, we test these hypotheses using data on Italy in the first and second 2020 pandemic waves. Results show that pandemic severity negatively affected new firm creation during the first wave. Shutdown policies had negative effects too, especially in the regions where the pandemic was less severe. The effects of demand stimulus policies were positive and stronger the less severe the pandemic was while the impact of firm support policies was negative in the regions where the pandemic was more severe. All these effects vanished in the second wave.

Suggested Citation

  • Evila Piva & Massimiliano Guerini, 2023. "The impact of the COVID-19 pandemic and pandemic-related policies on new firm creation: an analysis of the Italian case," Small Business Economics, Springer, vol. 60(3), pages 1009-1031, March.
  • Handle: RePEc:kap:sbusec:v:60:y:2023:i:3:d:10.1007_s11187-022-00621-w
    DOI: 10.1007/s11187-022-00621-w
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11187-022-00621-w
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.

    File URL: https://libkey.io/10.1007/s11187-022-00621-w?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Warwick McKibbin & Roshen Fernando, 2021. "The Global Macroeconomic Impacts of COVID-19: Seven Scenarios," Asian Economic Papers, MIT Press, vol. 20(2), pages 1-30, Summer.
    2. Brizeida Raquel Hernández-Sánchez & Giuseppina Maria Cardella & José Carlos Sánchez-García, 2020. "Psychological Factors that Lessen the Impact of COVID-19 on the Self-Employment Intention of Business Administration and Economics’ Students from Latin America," IJERPH, MDPI, vol. 17(15), pages 1-22, July.
    3. Le, Kien & Nguyen, My, 2021. "The psychological burden of the COVID-19 pandemic severity," Economics & Human Biology, Elsevier, vol. 41(C).
    4. Philippe Aghion & Richard Blundell & Rachel Griffith & Peter Howitt & Susanne Prantl, 2009. "The Effects of Entry on Incumbent Innovation and Productivity," The Review of Economics and Statistics, MIT Press, vol. 91(1), pages 20-32, February.
    5. Carla Bustamante & Carlos Poblete & José Ernesto Amorós, 2020. "Entrepreneurial intentions in the context of a natural disaster," International Journal of Emerging Markets, Emerald Group Publishing Limited, vol. 17(5), pages 1198-1217, December.
    6. Pontus Braunerhjelm, 2022. "Rethinking stabilization policies; Including supply-side measures and entrepreneurial processes," Small Business Economics, Springer, vol. 58(2), pages 963-983, February.
    7. Asger Lau Andersen & Emil Toft Hansen & Niels Johannesen & Adam Sheridan, 2022. "Consumer responses to the COVID‐19 crisis: evidence from bank account transaction data," Scandinavian Journal of Economics, Wiley Blackwell, vol. 124(4), pages 905-929, October.
    8. Yu, Li & Orazem, Peter F. & Jolly, Robert W., 2009. "Stopping Start-Ups: How the Business Cycle Affects Entrepreneurship," Working Papers 54083, Iowa State University, Department of Economics.
    9. Goodell, John W., 2020. "COVID-19 and finance: Agendas for future research," Finance Research Letters, Elsevier, vol. 35(C).
    10. R Maria del Rio-Chanona & Penny Mealy & Anton Pichler & François Lafond & J Doyne Farmer, 2020. "Supply and demand shocks in the COVID-19 pandemic: an industry and occupation perspective," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 36(Supplemen), pages 94-137.
    11. Klapper, Leora & Laeven, Luc & Rajan, Raghuram, 2006. "Entry regulation as a barrier to entrepreneurship," Journal of Financial Economics, Elsevier, vol. 82(3), pages 591-629, December.
    12. Inés Ruiz-Rosa & Desiderio Gutiérrez-Taño & Francisco J. García-Rodríguez, 2020. "Social Entrepreneurial Intention and the Impact of COVID-19 Pandemic: A Structural Model," Sustainability, MDPI, vol. 12(17), pages 1-17, August.
    13. Amankwah-Amoah, Joseph & Khan, Zaheer & Wood, Geoffrey, 2021. "COVID-19 and business failures: The paradoxes of experience, scale, and scope for theory and practice," European Management Journal, Elsevier, vol. 39(2), pages 179-184.
    14. Hausman, Jerry, 2015. "Specification tests in econometrics," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 38(2), pages 112-134.
    15. Klapper, Leora & Love, Inessa, 2011. "The impact of the financial crisis on new firm registration," Economics Letters, Elsevier, vol. 113(1), pages 1-4, October.
    16. Maksim Belitski & Christina Guenther & Alexander S. Kritikos & Roy Thurik, 2022. "Economic effects of the COVID-19 pandemic on entrepreneurship and small businesses," Small Business Economics, Springer, vol. 58(2), pages 593-609, February.
    17. Kuckertz, Andreas & Brändle, Leif & Gaudig, Anja & Hinderer, Sebastian & Morales Reyes, Carlos Arturo & Prochotta, Alicia & Steinbrink, Kathrin M. & Berger, Elisabeth S.C., 2020. "Startups in times of crisis – A rapid response to the COVID-19 pandemic," Journal of Business Venturing Insights, Elsevier, vol. 13(C).
    18. Charles A. Campbell, 1992. "A Decision Theory Model for Entrepreneurial Acts," Entrepreneurship Theory and Practice, , vol. 17(1), pages 21-27, October.
    19. David B. Audretsch (ed.), 2006. "Entrepreneurship, Innovation and Economic Growth," Books, Edward Elgar Publishing, number 4130.
    20. Khlystova, Olena & Kalyuzhnova, Yelena & Belitski, Maksim, 2022. "The impact of the COVID-19 pandemic on the creative industries: A literature review and future research agenda," Journal of Business Research, Elsevier, vol. 139(C), pages 1192-1210.
    21. Pe'er, Aviad & Vertinsky, Ilan, 2008. "Firm exits as a determinant of new entry: Is there evidence of local creative destruction?," Journal of Business Venturing, Elsevier, vol. 23(3), pages 280-306, May.
    22. Brück, Tilman & Llussá, Fernanda & Tavares, José A., 2011. "Entrepreneurship: The role of extreme events," European Journal of Political Economy, Elsevier, vol. 27(S1), pages 78-88.
    23. Audretsch, David B. & Keilbach, Max C. & Lehmann, Erik E., 2006. "Entrepreneurship and Economic Growth," OUP Catalogue, Oxford University Press, number 9780195183511.
    24. Kamhon Kan & Shin-Kun Peng & Ping Wang, 2017. "Understanding Consumption Behavior: Evidence from Consumers' Reaction to Shopping Vouchers," American Economic Journal: Economic Policy, American Economic Association, vol. 9(1), pages 137-153, February.
    25. Edeoba William Edobor & Maria I. Marshall, 2021. "Earth, wind, water, fire and man: How disasters impact firm births in the USA," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 107(1), pages 395-421, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dustin Chambers & Jonathan Munemo, 2019. "Regulations, institutional quality and entrepreneurship," Journal of Regulatory Economics, Springer, vol. 55(1), pages 46-66, February.
    2. Michal Hrivnák & Peter Moritz & Marcela Chreneková, 2021. "What Kept the Boat Afloat? Sustainability of Employment in Knowledge-Intensive Sectors Due to Government Measures during COVID-19 Pandemic," Sustainability, MDPI, vol. 13(15), pages 1-21, July.
    3. Léon, Florian, 2019. "Long-term finance and entrepreneurship," Economic Systems, Elsevier, vol. 43(2), pages 1-1.
    4. George, Ammu & Li, Changtai & Lim, Jing Zhi & Xie, Taojun, 2021. "From SARS to COVID-19: The evolving role of China-ASEAN production network," Economic Modelling, Elsevier, vol. 101(C).
    5. Ali Zackery & Joseph Amankwah-Amoah & Zahra Heidari Darani & Shiva Ghasemi, 2022. "COVID-19 Research in Business and Management: A Review and Future Research Agenda," Sustainability, MDPI, vol. 14(16), pages 1-32, August.
    6. Calá, Carla Daniela & Arauzo Carod, Josep Maria & Manjón Antolín, Miguel C., 2015. "The Determinants of Entrepreneurship in Developing Countries," Working Papers 2072/246964, Universitat Rovira i Virgili, Department of Economics.
    7. Zoltan Acs, 2012. "Public Policy in an Entrepreneurial Society," Chapters, in: Michael Dietrich & Jackie Krafft (ed.), Handbook on the Economics and Theory of the Firm, chapter 36, Edward Elgar Publishing.
    8. Thomas Gries & Wim Naudé, 2021. "Extreme Events, Entrepreneurial Start-Ups, and Innovation: Theoretical Conjectures," Economics of Disasters and Climate Change, Springer, vol. 5(3), pages 329-353, October.
    9. Jonathan Munemo, 2018. "Entrepreneurial Success in Africa: How Relevant Are Foreign Direct Investment and Financial Development?," African Development Review, African Development Bank, vol. 30(4), pages 372-385, December.
    10. Calá, Carla Daniela, 2014. "Regional issues on firm entry and exit in Argentina: core and peripheral regions," Nülan. Deposited Documents 2023, Universidad Nacional de Mar del Plata, Facultad de Ciencias Económicas y Sociales, Centro de Documentación.
    11. Dienes, Christian & Schneck, Stefan & Wolter, Hans-Jürgen, 2018. "Die Auswirkungen des Gründungsgeschehens auf das regionale Wirtschaftswachstum," IfM-Materialien 270, Institut für Mittelstandsforschung (IfM) Bonn.
    12. Audretsch, David B. & Lehmann, Erik E. & Menter, Matthias & Wirsching, Katharine, 2021. "Intrapreneurship and absorptive capacities: The dynamic effect of labor mobility," Technovation, Elsevier, vol. 99(C).
    13. Boudreaux, Christopher & Caudill, Steven, 2019. "Entrepreneurship, Institutions, and Economic Growth: Does the Level of Development Matter?," MPRA Paper 94244, University Library of Munich, Germany.
    14. Colin Kirkpatrick, 2012. "Economic Governance: Improving the Economic and Regulatory Environment for Supporting Private Sector Activity," WIDER Working Paper Series wp-2012-108, World Institute for Development Economic Research (UNU-WIDER).
    15. Christopher Boudreaux & Anand Jha & Monica Escaleras, 2021. "Weathering the Storm: How Foreign Aid and Institutions Affect Entrepreneurship Following Natural Disasters," Papers 2104.12008, arXiv.org.
    16. Francesco Manaresi & Carlo Menon & Pietro Santoleri, 2021. "Supporting innovative entrepreneurship: an evaluation of the Italian “Start-up Act” [The effects of entry on incumbent innovation and productivity]," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 30(6), pages 1591-1614.
    17. Rui Torres de Oliveira & Simona Gentile-Lüdecke & Sandra Figueira, 2022. "Barriers to innovation and innovation performance: the mediating role of external knowledge search in emerging economies," Small Business Economics, Springer, vol. 58(4), pages 1953-1974, April.
    18. Ioannis Giotopoulos & Alexandra Kontolaimou & Aggelos Tsakanikas, 2017. "Drivers of high-quality entrepreneurship: what changes did the crisis bring about?," Small Business Economics, Springer, vol. 48(4), pages 913-930, April.
    19. Lukas Matejovsky & Sandeep Mohapatra & Bodo Steiner, 2014. "The Dynamic Effects of Entrepreneurship on Regional Economic Growth: Evidence from Canada," Growth and Change, Wiley Blackwell, vol. 45(4), pages 611-639, December.
    20. Giuseppe Albanese & Raffaello Bronzini & Luciano Lavecchia & Giovanni Soggia, 2019. "Regional policies for Italian innovative start-ups," Questioni di Economia e Finanza (Occasional Papers) 511, Bank of Italy, Economic Research and International Relations Area.

    More about this item

    Keywords

    COVID-19; Disasters; New firm creation; Policy measures;
    All these keywords.

    JEL classification:

    • H84 - Public Economics - - Miscellaneous Issues - - - Disaster Aid
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:sbusec:v:60:y:2023:i:3:d:10.1007_s11187-022-00621-w. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.