Building a space entrepreneurship industry: The role of entrepreneurial support programs for startup growth

Given their relevance to the development of the entrepreneurship industry, several studies have investigated the structure, emergence, and effects on firm-level performance of entrepreneurial support organizations (ESOs). However, to date we possess limited knowledge on the effect of their tailored entrepreneurial support programs (ESPs) on startup growth, particularly in nascent settings. Drawing on signaling and learning theoretical mechanisms, we develop hypotheses to examine how sector-specific ESPs, backed by a high-status partner, influence startup growth in the nascent setting of the (new) space economy. We test our hypotheses on a unique dataset of 1043 space startups observed over the years 2005–2022, 357 of which were supported by the ESA BIC program—a sector-specific ESP sponsored by the European Space Agency and delivered through local ESOs across Europe. The empirical results show that supported startups, compared to their unsupported counterparts, experienced higher growth in total assets both during the program and afterwards, and higher growth in employment during the program, but not afterwards. We observe no significant differences in turnover growth. Furthermore, supported startups have a higher likelihood of attracting Venture Capital funding. These findings advance our understanding of the emerging space entrepreneurship industry, offering implications for both theory and practice.