The Role of Industry Variety in the Creation of Innovative Start-ups in Italy. By Roberto Antonietti and Francesca Gambarotto

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.

ROBERTO ANTONIETTI holds a PhD in Law and Economics and is currently Associate Professor of Economic Policy at the University of Padova, “Marco Fanno” Department of Economics and Management. His research interests include: the geography of innovation, regional diversification and branching, determinants and socio-economic effects of foreign direct investments (FDI) in host regions, and environmental economics with focus on eco-innovation and energy efficiency. Email: roberto.antonietti@unipd.it

FRANCESCA GAMBAROTTO is Associate Professor at the University of Padova, “Marco Fanno” Department of Economics and Management. Her main research interests include the geography of innovation, the capitalism diversity effect on the development of the European integrated industrial area, the analysis of entrepreneurial and public choices with textual analysis, the consequences of the digital economy on urban development. Email: francesca.gambarotto@unipd.it