Public funding for startups in Argentina: an impact evaluation

A broad literature has found that the misallocation of entrepreneurial talent has strong effects on productivity. To investigate whether the government can improve entrepreneurial activity, we analyze a policy aimed at promoting innovative startups through the provision of funding and technical assi...

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Bibliographic Details
Published in:Small business economics 2016-02, Vol.46 (2), p.295-309
Main Authors: Butler, Inés, Galassi, Gabriela, Ruffo, Hernán
Format: Article
Language:English
Subjects:
Business and Management
Business entities
Business government relations
Costs
Developing countries
Effects
Employment
Entrepreneurs
Entrepreneurship
Funding
Government grants
Industrial Organization
Innovations
Intervention
LDCs
Limited partnerships
Linear regression
Management
Managerial skills
Microeconomics
Net income
Polls & surveys
Productivity
Public policy
Quadratic functions
Regression analysis
Start up firms
Startups
Talent
Venture capital
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Summary:A broad literature has found that the misallocation of entrepreneurial talent has strong effects on productivity. To investigate whether the government can improve entrepreneurial activity, we analyze a policy aimed at promoting innovative startups through the provision of funding and technical assistance to potential entrepreneurs in Buenos Aires, Argentina. We conduct a survey and use regression discontinuity methods to identify the effects of the policy. We find significant effects on enterprise creation and survival as well as on employment. Overall, we show that small-scale public policy can help entrepreneurs overcome a wide variety of barriers to firm entry and improve the allocation of their entrepreneurial talent.
ISSN:0921-898X
1573-0913
DOI:10.1007/s11187-015-9684-7