Growth and Investment Sensibility on Cash Flow in the Firms of the South Italy

Author/s Giuseppe Cinquegrana, Domenico Sarno
Publishing Year 2009 Issue 2009/97 Language Italian
Pages 19 P. 91-109 File size 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 codes: E22, G31, G32

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Giuseppe Cinquegrana, Domenico Sarno, Crescita e sensibilità degli investimenti al cash flow nelle imprese del Mezzogiorno in "STUDI ECONOMICI " 97/2009, pp 91-109, DOI: 10.3280/STE2009-097003