Abstract

The paper shows how the small and medium enterprises belonging in less developed regions of the Southern Italy face higher liquidity constraints compared to the firms of the Center-North Italy regions. The sources of this constraint are the undersized and higher risk of firm's activity. Conseguently the credit rationing is more extensive. In order to analyse the effects on the potential growth of firm's production, an simple model is preliminarly presented and then is estimated. The results confirm the existence of the bottleneckness of financial resources devoted to finance current production that constrains the accumulation of working capital in the face of favorable market opportunities.