Project details
Title:
Entrepreneurial ecosystem and business registration during the COVID-19-pandemic: a focus on female entrepreneur (20222SBH75)
Type:
National
Start Date:
January 10, 2023
End Date:
September 30, 2025
Principal Investigator:
Francesco Perugini
Other Units Involved:
Mercatorum University
Keywords:
Entrepreneurship, COVID-19, entrepreneurial ecosystem
Description:
The discover and the spread of the COVID-19 in 2020 had a significant impact on the start-up of new businesses in many countries around the world and relevant repercussions for aggregate employment, entrepreneurship, and economic activity (Belitski et al. 2021). The COVID-19 pandemic has hit hard particularly Italy, the first European country where the virus was initially detected. Since the beginning of the pandemic there are about 61 thousand less new businesses created with respect to the same period in 2019, a fall of 17.2%. Data revealed that the overall level of business formation decreased especially during the March-May period, when the Italian government took containment measures to restrict mobility and economic activities. However, in the following months once these measures were lifted there has been only a slight recover of business registration, so this created a missing generation of new firms.
This disruption of start-up activity was particularly severe in Northern Italy (-18.2%), where the virus was initially detected, but a consistent decline has been observed also in the Centre (-19.2%). By contrast, in the South of Italy, where the spread of the COVID-19 was late and more contained, the fall in business registration has been more limited (-14.6%).
The spread of the COVID-19 and the containment measures adopted by the government had a heterogeneous impact also across sectors, both in terms of employment and business registration.
Since the effect of the pandemic on business registration has been geographically and sectoral uneven, this raises the question about which factors, other than the spread of the COVID-19 and the containment measures, played a relevant role on entrepreneurial activities at local level. Moreover, one interesting issue that needs more investigation is how particular forms of entrepreneurship, such as female entrepreneurship, have reacted to this exogeneous shock.
Objectives:
The aim of this research project is to investigate these issues. Moreover, given that the shock impacted in heterogeneous way across territories, we aim at investigating which factors, if any, have contributed to moderate or penalized some geographical areas/sectors compared to others. In this respect, one of the factors that has a relevant role in explaining business registration and business growth is the so-called Entrepreneurial Ecosystem (EE) (Stam 2018). This term has been widely used in scholarly publishing to highlight the mechanisms, institutions, networks, and cultures that support entrepreneurs (Malecki 2018; Spigel and Harrison 2018). It is recognized that EE plays an important role in fostering entrepreneurship therefore it is particularly interesting to assess to what extent EE played a moderating role for business registration during the COVID-19 pandemic.
Moreover, the project looks at female entrepreneurship and investigate what, if any, are the reason that favor or prevent women form starting a new venture. The aims is to identify those who a) were willing to start a new venture but did not because of the spread of the COVID-19 pandemic; b) have started a new venture during the pandemic; c) postponed their intention to start a new venture.
Application Contexts:
Italian provinces.
Expected Results:
This research project has relevant scientific and economic impacts. First of all, the research project is going to considers the effects of CODIV-19 on business registration at the Italian NUTS_3 provincial level. Most of previous literature looked at the determinants of the COVID-19 spread in Italy (see, for instance, Ascani, Faggian, and Montresor 2021, among others) or analyzed the consequences at the macroeconomic level (Bank of Italy, 2020). Only few researchers concentrate the attention on new business registration, but these studies are at the US state level or provides only a descriptive summary on new firm creation in Germany (Fritsch et al. 2021).
Second, the research project provides an empirical assessment of the effect that the COVID-19 produce of female business registration. This is an issue that is unexplored in the literature, and it is particularly relevant because it might shed more light for understanding the existence of a gender gap in entrepreneurship.
Third, the research project focuses on evaluating the EE potentials effect on business creation to explain the heterogeneous impact of the pandemic. Indeed, a vital and dynamic EE is extremely important for firm creation because businesses, particularly the small ones, do not work in isolation but instead are embedded in an EE that is dependent on environmental conditions (Audretsch et al. 2021; Bruns et al. 2017; Fritsch 2013; Malecki 2018; Ratten 2020; Spigel and Harrison 2018). This means that a variety of entities are required for EEs to function in a proper manner and, in turn, for business to originate and develop. The literature argues that the interaction among EE dimensions may encourage collaboration and information sharing and are therefore essential for small business entrepreneurs to survive and grow (Rashid and Ratten 2021), but also for the larger and the more innovative ones (Gueguen et al. 2021), especially when there are external shocks such as the COVID-19 pandemic. The moderating role played by EE on business registration when the economy is hit by an exogeneous shock has been already investigated in the empirical literature. This literature found that regions with a high level of EE should be less exposed to the consequences of exogenous shocks (Williams et al. 2013; Williams and Vorley 2014), because EE enhances the capacity of high growth firms to react and resist to an external shock (Iacobucci and Perugini 2021). However, there is no empirical studies that look at the effect produced by the COVID-19 pandemic.
Fourth, the research project aims at evaluating the impact that EE has at local level, and thus contributes to the design and implementation of the policy-making process of the local authorities. Indeed, local authorities may contribute to shape and promote an EE, given that their policies may directly or indirectly impact on the EE components and thus favoring the conditions to spur entrepreneurship. In the Italian case, provincial authorities have a limited importance in the administrative structure, however they are responsible for implementing decentralized policies in relevant sectors such as health, education, transport, culture, energy policy and environmental protection, which are functional in promoting and sustaining the economic environment and in creating the necessary conditions for firms, universities, and entrepreneurs to implement entrepreneurial activities (Calcagnini and Perugini 2019; Veneri and Murtin 2016).
Achivied Results:
A database has been developped and a measure of entrepreneurial ecosystem has been created for measuring the strenght of ecosystems in promoting the birth and growth of new ventures. The correlation between firm birth and the diffusion of the COVID-19 and the empirical analysys at local level has been carried out. Moreover, the analysis looked at female entrepreneurship dynamic during the pandemic.
