The effect of incubation on business performance: A comparative study in the Centro region of Portugal

Abstract

Purpose - The role that incubators play in business performance is a topic that has been discussed in the literature. They help to create the necessary conditions for the development of entrepreneurship and business innovation, but studies on their real contribution are lacking, especially in contexts such as the Portuguese one. Business incubators have been strong drivers of entrepreneurship and innovation. The main objective of this study is to assess whether business incubation offers benefits to incubated companies compared to non-incubated ones, particularly in terms of performance. Design/methodology/approach Data were collected from incubated and non-incubated companies in the central region of Portugal. These two groups of companies (incubated and non-incubated) were initially compared using the t-test and the Mann-Whitney test. Then, using linear regression models, the impact of incubation on performance variables was estimated, adjusting for the effect of control variables, when significant. Findings The results suggest that in the first years of life, incubated companies present a higher level of performance than non-incubated ones, an effect that decreases as companies become more mature. Originality/value - The study contributes to deepening the understanding of the role that business incubators play, providing further evidence that in their early life incubated companies outperform non-incubated ones.