Higher education institutions and innovative entrepreneurship: a regional analysis

This article investigates the relationship between the supply of graduates and innovative entrepreneurship in Italian provinces between 2014 and 2022. We estimate panel data models using a novel dataset, controlling for the different ways higher education institutions (HEIs) might affect start-up creation. The results suggest that graduates contribute significantly to innovative entrepreneurship, especially in science, technology, engineering and mathematics (STEM) fields. We find that STEM graduates might be particularly effective in provinces characterised by a low share of tertiary-educated population. As a main policy indication, we suggest that HEIs can play a pivotal role in combatting low development traps by improving the quality of entrepreneurial ecosystems.