Startup performance from an economic development perspective: impact evaluation after funding stage

Partal M. O., GÖNEL F.

Global Business and Economics Review, vol.32, no.4, pp.357-376, 2025 (Scopus) identifier identifier

  • Publication Type: Article / Article
  • Volume: 32 Issue: 4
  • Publication Date: 2025
  • Doi Number: 10.1504/gber.2025.146493
  • Journal Name: Global Business and Economics Review
  • Journal Indexes: Scopus, International Bibliography of Social Sciences, Aerospace Database, Communication Abstracts, EconLit, INSPEC, Metadex, Civil Engineering Abstracts
  • Page Numbers: pp.357-376
  • Keywords: entrepreneurship, financial support, firm performance, funds, government grants, impact evaluation, regional development, SMEs, startup, subsidy
  • Yıldız Technical University Affiliated: Yes

Abstract

Startups, which are by nature different to traditional enterprises due to their innovative and technological features, are often defined as SMEs with the potential to grow rapidly. This study intends to explore the performance of startups from an economic development perspective. In this paper, a counterfactual impact evaluation will be implemented for a treatment group, which is funded by investors in Istanbul, Turkey. The results are compared to those of a control group. Employing difference in differences estimation, the comparison is based on a variety of indicators including employment, revenue, and profit generation in the ICT sector. Our results show us that the performance of funded startups positively diverges from the unfunded startups after the intervention period. At the end of this study, it is suggested that governments should motivate startups by acting as investors rather than grant allocators in the entrepreneurship ecosystem.