To what extent do young innovative companies take advantage of policy support to enact innovation appropriation mechanisms?

Innovativeentrepreneurshipisattheheartofeconomicdevelopmentinallmoderneconomicsystems.However, weobserveinseveraldevelopedcountries-especiallyEurope-alanguishinginthecapacitytofostercreative destruction(i.e.SchumpeterMark1,SM1)dynamicsandtocreateyounginnovativecompanies(YICs),capable to establishthemselvesas leadersinmarkets or becomesuccessfulinnovators.Onekeyissue thatisoftenadvocatedinthisrespectisthedeficitsufferedfromYICsinfullyprotectingtheirinnovationsandappropriating(at least in part) returns from them. The usage of formal (e.g., intellectual property rights) and informal (e.g., secrecy, leadtime,accesstocomplementaryassets)instrumentstoprotectintellectualpropertyassetshas the potentialtoovercomethisdifficulty.DifferenttypesofpolicymechanismshavebeenputinplacetohelpYICs. However, high implicit and explicit costs and barriers prevent YICs’ use of protection strategies, limiting the ability to generate SM1 dynamics or accessing market for ideas, even upon policy support. By relying on the resource-basedviewofthefirm,ourpaperinvestigatestowhatextentacomprehensivesetofpolicymeasures recentlyintroducedintheItaliancontextandfocusedonalleviatingthehurdlessufferedbyYICsisassociated withthechoiceofYICstoprotecttheirinnovations.Theeconometricanalysesbasedonmorethan1,600Italian YICs show how the use of financial policy measures are associated to both formal and informal instruments, whilelabourpolicymeasuresareonlyrelatedtoformalones.