Assessing the determinants of fast growth in Italy

Few firms grow in a rapid way, but their contribution to employment growth is often impressive. The main purpose of this paper is to analyze both external and internal factors which can affect the probability of being a high-growth firm (HGF) in Italy. We found that HGFs are on average young firms and are present in different sectors, but the role of demand is important to understand their performance at sectoral level. Moreover, our findings show that financial constraints and profitability are not associated with the probability of being a fast-growing firm. HGFs, on average, are characterised by high productivity, but only when growth is measured in terms of sales. The most original results of this study concerns endogenous determinants of fast growth, which have not so far been adequately examined in the literature. First, we found that the concentration of ownership is important for HGFs that grow in sales. Second, the quality of human capital is a strong point for firms experiencing rapid employment growth.