- 04 Dec 2019
Do the rules of the game determine who is playing and how? Institutional change and innovative entrepreneurship
04 Dec 2019 - 10:30 am - 11:30 pm
Prior research shows that innovative entrepreneurship enhances economic development. However, it is becoming increasingly evident that it is not the number of new startups that matter for economic development but rather their quality. This paper contributes to the nexus of entrepreneurship and policy by studying whether a policy reform can facilitate the transition from quantity to quality of entrepreneurship. We investigate the effect of the Italian policy intervention targeting young innovative companies on both the human capital of entrepreneurs and the innovativeness of the pursued entrepreneurial projects, along with how these effects ultimately translate into the entrepreneurial performance. The findings indicate that the reform, particularly lowering growth barriers, attracts founders endowed with the most valuable industry-specific, managerial and/or entrepreneurial experience. These individuals also pursue more innovative projects and are able to capitalize most effectively on the introduced benefits. Overall, we show that a policy reform that decreases barriers to entrepreneurship and, most importantly, fosters access to funding and acquisition of highly skilled labor is able to attract superior entrepreneurs and stimulate them to pursue more R&D-intensive projects.
Technical University of Munich
TUM School of Management