• innovative startups
• performance
• policy
• survival

The survival and performance of innovative startups are widely debated in the literature, yet the impact of innovativeness on their success remains unclear. Furthermore, despite significant advancements in this research field, a comprehensive academic literature review is still lacking.
The first chapter of this work aims to address this gap and contribute to the ongoing literature debate by examining the evolution of research in this field through a bibliometric approach. It aims to provide an objective literature review based on relevant keywords, highlighting significant future research directions.
This chapter analyzes 312 papers on innovativeness and the performance and survival of startups, from 1981 to 2023. We use the Scopus database to collect relevant studies, while we employ VosViewer software for data analysis.
Our findings underline that innovative businesses play a crucial role in economic development, and policymakers often support their survival and growth through incentives and tax reliefs. Only by introducing these measures in the analysis, the debate on the relationship between innovativeness and startup success can be fully resolved.
Chapter 2 aims to advance the debate in the innovativeness literature by deepening the role of policy incentives in shaping the survival rates of innovative startups.
Our study focuses on Italy, as it legally defines innovative startups and clearly provides them with economic benefits for their first five years of life to foster their growth and societal impact. But is this type of policy truly effective in supporting innovative startups?
Few empirical studies investigate the impact of policies on the survival of innovative startups. To address this gap, we collect data on innovative and non-innovative startups from the Italian Chamber of Commerce register database and Aida-BvD database. Our analysis spans 2013 to 2022, employing more than 800,000 observations. We perform a Propensity Score Matching (PSM) and a Cox proportional hazard model to compare the survival rate of these two groups.
In contrast to existing literature, our findings show that innovative startups have a higher survival probability than non-innovative startups, but only during their early years, coinciding with the policy benefits period. The sharp decline in survival rates once the benefits expire suggests potential inefficiencies in the current legal support system. This trend suggests that policy incentives may inflate the initial performance without fostering sustainable growth, potentially contributing to the emergence of “zombie firms”. These results highlight the need for further empirical research to explore alternative policy approaches that better support economic development. Policymakers should reconsider how they support innovation, as only offering economic benefits appears inefficient to support the success of innovative startups.
Chapter 3 expands the literature debate by exploring the social orientation of innovative business. Social innovative startups are often seen as a tool of addressing critical societal challenges, yet they are frequently perceived as disadvantaged compared to traditional, profit-driven ventures. Since social innovative startups focus on balancing both economic and social objectives, they are assumed to face inherent “double externalities” that prevent their ability to compete equally with their private-sector counterparts. To offset this perceived disadvantage, governments and institutions commonly provide financial incentives to investors, to channel their capital toward social innovation. However, is this type of support truly necessary?
Limited empirical research compares the performance of social and non-social innovative startups. We employ a longitudinal dataset of innovative Italian startups from the Italian Chamber of Commerce and Aida-BvD database, collecting more than 11,000 observations. Applying a Propensity Score Matching (PSM), our study investigates whether social innovative startups —whose investors benefit from financial incentives— demonstrate any substantial differences in profitability compared to non-social innovative ones.
Surprisingly, our findings reveal no significant differences in profitability between the two groups, highlighting the need for greater caution in providing tax benefits to investors to spur innovation. These results suggest shifting the focus to alternative incentives based on measurable societal contributions of social firms, rather than remaining anchored to passive tax subsidies.