Start-up size and industrial dynamics: some evidence from Italian manufacturing

Abstract

The aim of this paper is to shed some light on industry dynamics in Italy. For this purpose we use a large and comprehensive longitudinal data base, identifying the start-up of new manufacturing firms and their subsequent post-entry performance. This enables us to link the survival and growth of firms in each manufacturing industry specifically to their start-up size. While in a tobit regression (at the two-digit level) we find no evidence to link start-up size with survival, the growth rates are negatively and significantly correlated with initial size. As in previous studies dealing with other countries, this evidence suggests that Gibrat's Law fails to hold, at least for small, new-born manufacturing firms.