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Growth and Investment Sensibility on Cash Flow in the Firms of the South Italy
Journal Title: STUDI ECONOMICI  
Author/s: Giuseppe Cinquegrana, Domenico Sarno 
Year:  2009 Issue: 97 Language: Italian 
Pages:  19 Pg. 91-109 FullText PDF:  361 KB
DOI:  10.3280/STE2009-097003
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The analysis of the financial constraints on the firm growth deals with the relationship between the capital structure and the growth of the firm. On this subject there is a massive body of theoretical and empirical studies producing significant, but controversial results. The aim of the paper is to show that the growth of the Mezzogiorno’s small and medium sized firms is financially more constrained compared to the firms of the same size belonging in the other Italian regions. In order to confirm this thesis an empirical analysis about the sensibility of the investment on the internal finance is provided. From the estimates of the Eulero’s investment equation augmented by the cash flow variables follows that the contribution of the internal finance on the growth is higher for the Southern firms. The conclusions underline the larger difficulties by the Southern firms to access to external financial sources due to the higher opacity of the firms and the lower degree of the development of the financial markets in the Southern regions.
Jel Code: E22, G31, G32

Giuseppe Cinquegrana, Domenico Sarno, Growth and Investment Sensibility on Cash Flow in the Firms of the South Italy in "STUDI ECONOMICI " 97/2009, pp. 91-109, DOI:10.3280/STE2009-097003


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