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Picking Winners, Marking Them, or Re-Labelling Them? Staged Certification and Spurious Pre-Trends

Year: 2026

Type: article

Abstract: Voluntary certification policies channel fiscal, financial, and regulatory support, but their evaluation is complicated by self-selection and staged policy exposure. We therefore ask why certified firms display a performance premium, and whether it reflects a genuine treatment effect, selection on pre-existing growth trends, or earlier policy exposure misdated by a staged regime. Italy illustrates this problem: innovative start-up status expires sixty months after incorporation, after which firms may transition into the innovative-SME register while retaining similar benefits. Linking financial data for approximately 2900 certified and 1180 non-certified SMEs to Business Register records, we find that certified firms grow faster but are financially less solid, with roughly three-quarters of the revenue advantage emerging before registration. Entry clusters sharply around the expiry of start-up status, and 44 percent register within six years of incorporation. Crucially, pre-registration growth is absent among firms legally unable to hold prior start-up status but pronounced among likely transitioning firms. Standard robustness procedures do not detect this misdating. These results diagnose incomplete treatment histories; they do not identify the effect of either policy. In staged regimes, correctly identifying first policy exposure is therefore essential.

Source: Administrative Sciences

DOI: 10.3390/admsci16100484

Authors: Angelo Leogrande, Mauro di Molfetta, Valeria Notarnicola, Maria Giovanna Trotta, Antonio Volpe Plantamura

Language: English

Topic: Firm Innovation and Growth

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: gold

Estimated APC paid: $1,689

Funder: Regione Puglia