Start-Up Certification and Prices: Evidence from Markups and a Statutory Expiry in Italy

Italy grants registered innovative start-ups fee exemptions, investor tax relief and guaranteed credit, and removes that status sixty months after incorporation. This paper asks whether certification changes firms’ markups. Markups are estimated from a translog production function on 76,466 firm-years of certified start-ups, certified innovative SMEs and ordinary SMEs over 2015–2024. Certified firms price about 12 per cent below ordinary SMEs, but within firms the gap shrinks to 2 per cent and vanishes once persistence is modelled: registration selects firms rather than changing their pricing. Exploiting the statutory expiry, and a 2020 extension that shifted it by one year for adjacent cohorts, the loss of status leaves markups unchanged on average (2SLS −0.005, first-stage F = 750). An unsupervised partition shows this null combines falls of five to six per cent in capital- and materials-intensive firms with none elsewhere; regression learners and double machine learning confirm the central estimates.