Alessandro Arrighetti

Entry, growth and survival of manufacturing firms

This paper examines the interactions between entry size, growth rate, and probability of survival of firm. Standard microeconomics states that firm growth stems from relative efficiency differentials and that growth positively affects the likelihood of survival. Therefore, the selection hypothesis is unable to explain how a wide number of small newly born firms can survive at length even without growth and how an even larger set of firms with a higher than average growth rate exits the market in the first few years after the foundation. It is shown that one way out of these apparent paradoxes is to relax the hypothesis of a one-to-one link between initial relative efficiency and survival, and then develop a model based on different entry modes and growth patterns of the newly born firms.

Assessing the Determinants of High-Growth Manufacturing Firms in Italy

Abstract Few firms grow rapidly, but their contribution to employment growth is often impressive. The main purpose of this paper is to analyse both the external and internal factors that 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 industries, but the role of demand is important to understanding their performance at the sectoral level. Moreover, our findings show that financial constraints and profitability are not associated with the probability of being a HGF. 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 concern the endogenous determinants of rapid growth, which have yet to be adequately examined in the literature. First, we found that the concentration of ownership is important for HGFs that experienced rapid growth in their sales. Second, the quality of human capital is a strong point for firms experiencing rapid employment growth.

Entrepreneurial intention in the time of crisis: a field study

The aim of the work is to investigate the impact of a prolonged economic recession on the entrepreneurial intentions of young people (university students) distinguishing between propensity to start a new business (i.e. degree of interest in entrepreneurship) and perceived likelihood of becoming an entrepreneur (i.e. probability to succeed). Furthermore we verify if the recession strengthens the orientation to exploit new market opportunities, or simply supports self-employment objectives.Design/methodology/approach–Entrepreneurial intent and feasibility and psycho-social and economic variables concerning a sample of 3684 Italian university students enrolled in 12 different faculties. Information was gathered through questionnaires distributed in both electronic and paper-and-pencil form. Findings–Firstly, we found that while the perceived strength of the economic crisis does not impact on the propensity towards entrepreneurship, it has a negative and highly significant impact on the likelihood to start a business. Secondly, when we distinguished between opportunity-based and necessity-based types, we found that while for the latter the crisis impacts only on the perceived likelihood to become an entrepreneur, for the former it affects both dimensions of entrepreneurship, i.e., both propensity and perceived likelihood. Moreover, neither family support nor economic institutions are perceived as relevant in sustaining entrepreneurial intentions. On the contrary, the university is considered as a key support entity. Originality/value–The present paper is one of the few studies concerning the influence of rapid worsening of external economic context (severe recession) on the entrepreneurial intent. Research limitations–Reliance on cross-sectional questionnaires instead of an experimental design imposes caution about the causal relationships between predictors and entrepreneurial intent

Intangible Asset Dynamics and Firm Behaviour

We study the adoption of different patterns of intangible asset (IA) accumulation in manufacturing firms. Contrary to most of the previous literature, we find such patterns to be highly differentiated. In particular, we identify three types of firm behaviour: high and persistent, low and persistent, and discontinuous. We link the capability-based view of the firm to theories of asset complementarities and market signalling to explain how firm-specific traits affect such behaviours. We obtain the following results: first, the persistent accumulation of IAs is favoured by the internal availability of highly skilled personnel; second, firms with (a) large IA base and (b) high propensity to exploit complementarities in the asset stocks are more likely to persistently accumulate IAs than to discontinuously or never accumulate IAs and third, the adoption of quality management standards facilitates the accumulation of IAs, especially if this is done discontinuously. This paper adds to the previous literature in two ways: first, it highlights the existence of great heterogeneity in the dynamics of IA accumulation and, second, it provides an explanation for such heterogeneity.

Capitale sociale, contesto istituzionale e performance innovativa delle imprese

L’obiettivo del presente lavoro e l’analisi della relazione fra performance innovativa e fattori socio-istituzionali a livello territoriale. Emergono come rilevanti oltre al capitale sociale altre variabili quali l’attivismo istituzionale e l’accumulazione di esperienze di azione collettiva fra imprese. A parita di condizione, per le imprese l’adozione di innovazioni risulta piu probabile in un contesto locale dove il capitale sociale e elevato (e i fenomeni di illecito economico e criminalita sono contenuti), il tessuto delle relazioni sociali risulta esteso, le istituzioni intermedie svolgono un ruolo attivo e la tradizione di esperienze positive di cooperazione tra imprese appare particolarmente ricca.

The Sources of Heterogeneity in Firm Performance: Lessons from Italy

An extensive literature documents large and persistent within-industry heterogeneity of firm performance. While some authors explain such evidence in terms of factor misallocation, we provide an alternative framework that is based on the interaction among exogenous and endogenous factors. Exogenous factors, both supply and demand-related, define the opportunity set that is available to firms. Endogenous factors reflect instead firm-specific interpretations of such set, which combined with the available resources and capabilities determine firm’s strategic responses that can be markedly heterogeneous. Whenever the diversity of firm conducts is associated with relatively small profit differentials, firm heterogeneity can persist. Evidence based on the evolution of labour productivity and profit dispersion in the Italian manufacturing sector between the 1990s and early 2000s provides support for our interpretative framework.

Acculturation and Ethnic Hybridism in Immigrant Entrepreneurship

Received literature on immigrant entrepreneurship describes ethnic firms as founded to meet the needs of an ethnic community, display and use particular configurations of human and social capital drawing on ethnic resources. This is due, according to some authors, to the “acculturation lag” that characterize these entrepreneurs retaining traditional values from the heritage culture. Recent research has however shown that immigrant firms are undergoing significant changes in their organizational structures, such as the incorporation of native or non-co-ethnic partners or employees (i.e., firm multicultural hybridism). Nevertheless, research to date has not investigated whether these changes are accompanied by different acculturation patterns in entrepreneurs operating in companies characterized by different levels of multicultural hybridism. We tackle this question using a unique set of data collected with face-to-face interviews with 130 immigrant entrepreneurs in Northern Italy. Taking a cross-cultural psychological perspective, this study sheds some new light on the acculturation patterns of these different companies and suggests avenues for future research.

Social Capital, Local Institutions, and Cooperation between Firms

There are many different reasons behind cooperation between firms and many possible interpretations are assumed to be based on an assessment of endogenous benefits of collective action directly generated by taking part in a joint project. This paper attempts at verifying the interpretative capacity of models analysing the cooperation between firms using not only technological or organisational factors and rivalry between firms, but also some proxy variables of social capital, of experience accumulation in collective action and of institutional capacity for initiative. The specific aim of our work is hence that of providing an interpretation of Italian inter-province differentials in the propensity of inter-firm cooperation.