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Forum | Papers » The financial structure of Italian micro-firms: a comparison between traditional and innovative ones

The financial structure of Italian micro-firms: a comparison between traditional and innovative ones

Alessandra Tanda,Andrea Uselli
July 2019 - n. 7-8
Keywords: Micro-firms, financial leverage, Italy, innovative firms
Jel codes: G32, L26, O30

The paper analyses the decisions of micro-firms in terms of bank debt. For this purpose, we study the determinants of financial leverage of a sample of more than 4,700 Italian micro-firms for the period 2006-2016, distinguishing between innovative firms and traditional ones. Evidence shows that micro-firms have a high portion of short term debt. In the sample, innovative firms have a lower leverage, that can signal difficulties in expanding debt, probably because of high asymmetries of information. The inability to obtain external financing can limit their development and their positive impact on economic growth.

 

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