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

Voluntary certification policies channel fiscal, financial, and regulatory support, but their evaluation is complicated by self-selection and staged policy exposure. 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. Consequently, the apparent pre-treatment period may already reflect earlier policy exposure. Linking financial data for approximately 2,900 certified and 1,180 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 per cent 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 mis-dating. In staged regimes, correctly identifying first policy exposure is therefore essential.