The role of industry variety in the creation of innovative start-ups in Italy

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Abstract

This paper aims to ascertain whether related and unrelated industry variety affects the creation of innovative as opposed to other start-ups in Italian local labor market areas. The analysis combines elements from the knowledge spillover theory of entrepreneurship, the recombinant growth approach, and evolutionary economic geography. Using data on Italian innovative start-ups created between 2012 and 2015, and on firms newly registered with the Italian Chambers of Commerce, and applying appropriate count data models, our estimates show that innovative start-ups are more frequently created in areas where unrelated variety is higher. This is because innovative start-ups find more opportunities to recombine different pieces of knowledge or maximize their portfolio of demand opportunities, in such a setting, whereas a higher related variety stimulates the creation of other types of new start-up, for which it is easier to combine similar, complementary knowledge sources. We also find that half of the effect of related and unrelated variety comes from the localization of (innovative) start-ups in large urban areas.

Keywords

New start-ups Innovative start-ups Related variety Unrelated variety 

JEL classification

L26 M13 R11 O33 

Notes

Acknowledgments

The authors thank the editors of the special issue and two anonymous reviewers for their valuable comments to previous versions of the manuscript. The authors also thank ISTAT for data provision, in particular, Sandro Cruciani, for his suggestions on the creation of the dataset, and participants to the XX Uddevalla Symposium and the XXXVIII AISRE annual conference for their comments.

Compliance with ethical standards

Conflict of interest

The authors declare that they have no conflict of interest.

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Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2018

Authors and Affiliations

  1. 1.“Marco Fanno” Department of Economics and ManagementUniversity of PadovaPadovaItaly

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