Firms Use of Financial Leverage: Evidence from Italy

In Italy, businesses are widely recognized as a main source of economic growth and for the creation of jobs. This growth is very much dependent on access to external financial resources, but the access to external capital is also a critical issue. Some prior research has suggested that different structural elements of a company and governance characteristics are correlated with their financial leverage. However, to the best of our knowledge, few studies focus on gender governance in Italy. For this reason, our study contributes to advancing gender research in Italy. Our paper seeks to extend the findings of Coleman and Cohn (2000) regarding the association between corporate characteristics (both in terms of structure and governance) and financial leverage. Our sample consists of data collected from 2016 balance sheets and income statements of 578 Italian firms. Our study demonstrates the association between corporate characteristics and financial leverage. In summary, we are left with the following results: the age, size, organizational form, and profitability are correlated with the financial leverage; therefore, the corporate debt level is not correlated with the gender ownership. Additional analysis of differences in riskiness between male and women-led companies would be desirable but remains an interesting matter for future research.