Firm size and competitive indicators: the Italian case

The aim of this article is to analyse the different competitive factors of Italian firms, based on their size-differences, in order to identify the specific elements of the competitive advantages of micro firms, medium firms and big firms, that can help the industrial policy to use more size-specific and selective tools for each size of firm. The aim is to identify consistent correlations between firm dimension, productive sector and competitiveness indicators (specifically, value-added, turnover, labour cost, investments, productivity, profit share on value-added, % of export value on turnover) in order to determine the competitive advantage of firm dimension in each productive sector (using ATECO sectorial classification). Methods and Results The article is based on an econometric analysis, using a cross- section sectorial and dimensional approach, in the period 203-2008, for Italian firms. The enquiry "Structure and competitiveness of industrial and services firm system", of Italian statistical agency (ISTAT) has been used as data base. The economic results of firms, summarized by the value added, have been correlated to some explanatory variable, as the cost of labour per employee, the investment per employee, the labour productivity, the share of turnover coming from exports. The results show a radical difference in the competitive models of firms, according to their size class. While micro firms rely mainly on the control of production costs, and show a difficulty in investing and diversifying their final markets (and those firms are also under a growing competitive pressure on their internal market), medium firms have a strong competitive root in their ability to export. Big companies are reacting to the crisis increasing the ratio between capital and labour, and pushing towards a higher integration in the global markets. Conclusions The competitive models are highly diversified according to the firm size. While the competitive model of micro firms is somewhat traditional and, assuming a "passive position" in the globalisation processes, seems to be inadequate to the challenges of the present macroeconomic cycle, medium and big companies are pushing towards a higher integration in the commercial global processes, and in a higher share of capital/labour ratio, which is indicative (especially for the bigger firms) of a competitive model based on innovation, quality and product/market diversification. Those considerations give room to a more "size-specific" industrial policy. For instance, measures aimed at facilitating credit supply (like public guarantee funds) should be addressed to small firms, while attention should be focused on a better correlation between labour cost and firm’s economic results (stimulating, for example, the participation of workers to big companies capital) in the case of big enterprises.

Keywords: SMEs, competitiveness, cross-section models, econometric estimations, economic crisis, Italian economy

Jel codes: C31, D22, D24, L2, L5, L6, L7

Riccardo Achilli, Firm size and competitive indicators: the Italian case in "RIVISTA DI ECONOMIA E STATISTICA DEL TERRITORIO" 1/2013, pp 62-78, DOI: 10.3280/REST2013-001003