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Female entrepreneurship and government policy: evaluating the impact of subsidies on firms' survival

Author

Listed:
  • Elena Gennari

    (Bank of Italy)

  • Francesca Lotti

    (Bank of Italy)

Abstract

This paper assesses the effectiveness of Law 215/1992, an incentive scheme intended to boost female entrepreneurship in Italy. Under the law, which was only implemented in 1997 and remained in force for a decade, the allocation of subsidies among the regions was inversely proportional to their female labour market participation rates. Focussing on the subsidies for start-ups, we analyze survival patterns of subsidized versus non-subsidized firms. We find that subsidized firms show higher survival rates than non-subsidized firms for a period of up to five years after incorporation. After five years the survival patterns are very similar, leading us to conclude that the incentive scheme had no permanent effect on the subsidized firms but only produced a �honeymoon effect�.

Suggested Citation

  • Elena Gennari & Francesca Lotti, 2013. "Female entrepreneurship and government policy: evaluating the impact of subsidies on firms' survival," Questioni di Economia e Finanza (Occasional Papers) 192, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:opques:qef_192_13
    as

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    File URL: https://www.bancaditalia.it/pubblicazioni/qef/2013-0192/QEF_192.pdf
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    References listed on IDEAS

    as
    1. Pfeiffer, Friedhelm & Reize, Frank, 2000. "Business start-ups by the unemployed -- an econometric analysis based on firm data," Labour Economics, Elsevier, vol. 7(5), pages 629-663, September.
    2. Rajeev H. Dehejia & Sadek Wahba, 2002. "Propensity Score-Matching Methods For Nonexperimental Causal Studies," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 151-161, February.
    3. Jovanovic, Boyan, 1982. "Selection and the Evolution of Industry," Econometrica, Econometric Society, vol. 50(3), pages 649-670, May.
    4. Lionel Désiage & Richard Duhautois & Dominique Redor, 2010. "Do Public Subsidies Have an Impact on New Firm Survival? An Empirical Study with French Data," TEPP Working Paper 2010-04, TEPP.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Mascia, Danilo V. & Rossi, Stefania P.S., 2017. "Is there a gender effect on the cost of bank financing?," Journal of Financial Stability, Elsevier, vol. 31(C), pages 136-153.
    2. Stjepan Srhoj & Bruno Škrinjarić & Sonja Radas & Janette Walde, 2022. "Small matching grants for women entrepreneurs: lessons from the past recession," Small Business Economics, Springer, vol. 59(1), pages 117-142, June.
    3. Santos, Anabela, 2019. "Do selected firms show higher performance? The case of Portugal’s innovation subsidy," Structural Change and Economic Dynamics, Elsevier, vol. 50(C), pages 39-50.

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    More about this item

    Keywords

    entrepreneurship; subsidies; evaluation; survival;
    All these keywords.

    JEL classification:

    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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