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Are publicly funded Czech incubators effective? The comparison of performance of supported and non-supported firms

Author

Listed:
  • Ondřej Dvouletý
  • Maria Cristina Longo
  • Ivana Blažková
  • Martin Lukeš
  • Michal Andera

Abstract

Purpose - Even in established economies, empirical studies on the relationship between business incubation and firm performance do not show unequivocally positive results. The purpose of this paper is to contribute to this debate based on the empirical evidence from the under-researched Central and Eastern European region in which no similar study has been conducted before. Due to the shorter experience with the management of business incubators and less developed institutions, business incubators may not be so effective in supporting their tenants in this region. Design/methodology/approach - The authors utilise firm-level data from incubated Czech enterprises (n=205) founded after 2003 and compare them with those that have not received support from incubators. The authors implement three matching techniques to pair incubated and non-incubated companies. The outcome variables measured sales, price-cost margin, assets turnover, value added, size of total assets and size of personnel costs. Findings - Compared to the control group, incubated firms reported on average lower values of the above-mentioned indicators. Presented study shows that Czech incubators have not been successful in supporting growth of incubated firms. Practical implications - The study suggests that there is a clear room for improvements. Incubators should improve in attracting and selecting high potentials and in providing more effective support focussed on tenants’ growth, whereas policymakers should exercise stricter control regarding the money spent and effectiveness of incubators. Originality/value - The empirical analysis was conducted based on the research gap in the studies related to the impact of business incubation in the under-researched Central and Eastern European region. It also shows that positive results from similar studies done in established economies cannot be taken for granted as they depend on the quality of institutions in a particular country.

Suggested Citation

  • Ondřej Dvouletý & Maria Cristina Longo & Ivana Blažková & Martin Lukeš & Michal Andera, 2018. "Are publicly funded Czech incubators effective? The comparison of performance of supported and non-supported firms," European Journal of Innovation Management, Emerald Group Publishing Limited, vol. 21(4), pages 543-563, May.
  • Handle: RePEc:eme:ejimpp:ejim-02-2018-0043
    DOI: 10.1108/EJIM-02-2018-0043
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    More about this item

    Keywords

    Start-ups; Czech Republic; Propensity score matching; Business incubator; Entrepreneurship policy evaluation; M13; L53; L26;
    All these keywords.

    JEL classification:

    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • L53 - Industrial Organization - - Regulation and Industrial Policy - - - Enterprise Policy
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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