Female entrepreneurship and government policy: evaluating the impact of subsidies on firms' survival

This paper assesses the effectiveness of Law 215/1992, an incentive scheme intended to boost female entrepreneurship in Italy. Under the law, which was only implemented in 1997 and remained in force for a decade, the allocation of subsidies among the regions was inversely proportional to their female labour market participation rates. Focussing on the subsidies for start-ups, we analyze survival patterns of subsidized versus non-subsidized firms. We find that subsidized firms show higher survival rates than non-subsidized firms for a period of up to five years after incorporation. After five years the survival patterns are very similar, leading us to conclude that the incentive scheme had no permanent effect on the subsidized firms but only produced a �honeymoon effect�.