What does a start-up need to grow? An empirical approach for Italian innovative start-ups

Objectives. The aim of the work is to capture the role of internal and external characteristics in favouring the growth of innovative start-ups in their early stage of life. Methodology. The empirical approach of this paper is based on an econometrics analysis applied to 198 innovative start-ups. Findings. The results achieved in this work reveal the importance of internal R&D investment despite to a missing evidence of the relevance of general and government specific R&D investments of the area. Other interesting results are the importance of the firm involvement in the technological specialization of the area and the need of a general variety of technological diversification of the area to favour start-ups growth. Research limitations. The paper also involves a number of criticalities, first of all the short period of analysis (5 years), that do not allow to use more complex econometric methods better suited to capture the dynamics of growth. One other criticality seems to be the absence of some important variables controlling for internal characteristics of the firm. Practical Implications. The results imply that entrepreneurs should carefully evaluate their strategical choice in term of location of the start-up and investments in R&D as those could be important factors for the firm growth. Originality of the study. The work is an original attempt to measure the importance of both internal and external characteristics for start-up growth, the analysis cover the overall population of a new interesting category of firms, the innovative start-up.