The impact of the COVID-19 pandemic and pandemic-related policies on new firm creation: an analysis of the Italian case

This work contributes to disaster research by exploring the impact on new firm creation of the COVID-19 pandemic and the pandemic-related policies. We develop hypotheses on the individual and combined effects of pandemic severity and public policies aimed at controlling the spread of the disease (shutdown policies) or protecting the economy from its negative consequences (demand stimulus and firm support policies). Then, we test these hypotheses using data on Italy in the first and second 2020 pandemic waves. Results show that pandemic severity negatively affected new firm creation during the first wave. Shutdown policies had negative effects too, especially in the regions where the pandemic was less severe. The effects of demand stimulus policies were positive and stronger the less severe the pandemic was while the impact of firm support policies was negative in the regions where the pandemic was more severe. All these effects vanished in the second wave.