In this paper it is shown that the growth of southern Italian firms is financed mostly by internal finance, since external financing is more problematic and costly. Hence firm growth is subject to financial constraints. The economics of financial constraints deals with the relationship of financial structure to firm growth. Consequently, the “financial growth cycle” is used to analyse the features of the capital structure of the Mezzogiorno’s SMEs compared to Italy-wide SMEs. The growth-cash flow nexus is then empirically analysed by using the Gibrat growth model enriched by the cash flow variable
CAPITAL STRUCTURE AND GROWTH OF THE FIRMS IN THE BACKWARD REGIONS OF THE SOUTH ITALY
SARNO, Domenico
2008
Abstract
In this paper it is shown that the growth of southern Italian firms is financed mostly by internal finance, since external financing is more problematic and costly. Hence firm growth is subject to financial constraints. The economics of financial constraints deals with the relationship of financial structure to firm growth. Consequently, the “financial growth cycle” is used to analyse the features of the capital structure of the Mezzogiorno’s SMEs compared to Italy-wide SMEs. The growth-cash flow nexus is then empirically analysed by using the Gibrat growth model enriched by the cash flow variableFile in questo prodotto:
Non ci sono file associati a questo prodotto.
I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
