Template-Type: ReDIF-Paper 1.0
Author-Name: Primo AutoreAuthor-X-Name-First: MaurizioAuthor-X-Name-Last: BaussolaAuthor-Email: maurizio.baussola@unicatt.itAuthor-Workplace-Name: DISCE, Università CattolicaAuthor-Name: Secondo AutoreAuthor-X-Name-First: EleonoraAuthor-X-Name-Last: BartoloniAuthor-Email: bartolon@istat.itAuthor-Workplace-Name: ISTAT, Regional Office for Lombardy
Author-X-Name-First: Luca
Author-X-Name-Last: Bagnato
Author-Email: luca.bagnato@unicatt.it
Author-Workplace-Name: DISCE, Università Cattolica
Author-Name: Quarto Autore
Author-X-Name-First: Quarto
Author-X-Name-Last: Autore
Author-Email: quarto.autore@unicatt.it
Author-Workplace-Name: DISCE, Università Cattolica
Title: Waiting for Godot: the Failure of SMEs in the Italian 
Manufacturing Industry to Grow 
Abstract: Abstract of the paper.
We use a panel of Italian manufacturing firms for the period
2001-2014 to analyse the distribution of firm size, and then test
for the validity of Gibrat’s law using unit root tests. Although
Gibrat’s Law is rejected and the estimates suggest that small
firms grow faster than larger ones, we do not observe a signifi-
cant change in the average size of companies at the end of the
period under investigation. Also, by using a long-run Transition
Probability Matrix, we verify that the steady-state distribution
of firm size remains stable. The higher propensity to grow shown
by smaller firms is confined to the size class in which the firm
is established. We further investigate the relationship between
the rate of growth in a firm’s size conditional on specific firm
and industry characteristics.  Export intensity plays a signifi-
cant role in affecting the size growth rate together with industry
characteristics related to technological levels. Finally, we esti-
mate the probability that a firm increases in size relative to the
mean size prevailing in its own size class over a 14-year interval.
This approach enables us to highlight those factors that affect
this probability, thereby enabling us to underline how Gibrat’s
Law tests, although important, require complementary analysis
to ascertain whether a firm’s propensity to increase in size is a
long run effect and thus a significant modification of the distri-
bution of company size or only implies a marginal increase in
size within a reference size class.
Length: 31 pages
Creation-Date: 2018-03
Publication-Status: Published in Review of Economics, Month aaaa, pages nn1-nn2
File-URL: https://dipartimenti.unicatt.it/dises-dises-wp_18_132.pdf
File-Format: Application/pdf
File-Function: First version, aaaa
Number: dises1832
Classification-JEL: L11, L2, L6
Keywords: Gibrat’s Law, Lognormal distribution, firm size dis-
tribution.
Handle: RePEc:ctc:serie2:dises132