Green production as a factor of survival for innovative startups. Evidence from Italy

TL;DR

This study investigates how environmentally sustainable production processes influence the survival of innovative startups in Italy, finding that green startups tend to survive longer and are more likely to persist than non-green counterparts.

Contribution

It is the first empirical analysis to assess the impact of environmental sustainability on startup survival, controlling for other factors, using Italian data from 2009-2018.

Findings

Green startups tend to survive longer than non-green startups.

Green startups are more than twice as likely to survive.

Environmental sustainability may support economic development.

Abstract

Many studies have analyzed empirically the determinants of survival for innovative startup companies using data about the characteristics of entrepreneurs and management or focusing on firm- and industry-specific variables. However, no attempts have been made so far to assess the role of the environmental sustainability of the production process. Based on data describing the characteristics of the Italian innovative startups in the period 2009-2018, this article studies the differences in survival between green and non-green companies. We show that, while controlling for other confounding factors, startups characterized by a green production process tend to survive longer than their counterparts. In particular, we estimate that a green innovative startup is more than twice as likely to survive than a non-green one. This evidence may support the idea that environment sustainability can help economic development.