Abstract

The paper provides an analysis about the growth of Southern firms as opposed to firms belonging in the Central-Northern regions of Italy. The usual profitability-size and growth-size relationships are tested utilizing the data-base derived from the manufacturing firm sample of Mediocredito Centrale. The same relationships are enriched by introducing firm age variable in order to capture life cycle and learning effects in the growth process. The analysis shows that the well-known assumptions of this theoretical approach are not empirically confirmed relatively to Southern firms in some significant aspects and that the profitability profile and the growth behaviour of Mezzogiorno's firms are rather different compared to Central-Northern firms. The results confirm that the root of the problems of Southern firms lays in the obstacles that prevent them from growing and obtaining an adequate dimension.