Innovative startup creation: the effect of local factors and demographic characteristics of entrepreneurs

Abstract

The paper investigates factors affecting the creation of innovative startups—that is, new enterprises that produce, develop, and commercialize innovative goods or services of high technological value. Analyzing data on Italian provinces, the paper studies whether and how the birth rate of innovative startups is affected by the following characteristics of the local context: local density of universities and research centers, the education level of the local population, and the number of incubators in the area. In addition, the study tries to identify whether the impact of these contextual factors varies when firms are created by entrepreneurs that have peculiar demographic characteristics—i.e., that are female, young, or foreign-born. Hypotheses are tested through a multiple regression analysis that uses as the dependent variable innovative startup birth rates at provincial level, calculated using data regarding the 8264 innovative startups created in Italy between 2015 and 2018 in 105 Italian provinces. Results regarding the overall sample of innovative startups show that the innovative startups birth rate is positively related to education level and to the number of incubators in the area. However, the study highlights that differences in the demographic characteristics of the entrepreneurs correspond to a different relevance of the local contextual factors investigated in fostering innovative startup creation.