Munich Personal RePEc Archive

FINANCIAL AND LEGAL CONSTRAINTS TO FIRM GROWTH: THA CASE OF ITALY

SARNO, DOMENICO (2008): FINANCIAL AND LEGAL CONSTRAINTS TO FIRM GROWTH: THA CASE OF ITALY.

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Abstract

The aim of this study is to confirm empirically the implications of the theory about the law-finance-growth nexus. In order to verify the predictions of the theory, a panel data including three different types of data is used. All the data are referred to Italian provinces. The empirical analysis shows that between firms’ growth and financial development there is a first-order relationship, while between firms’ growth and legal enforcement as measured by the efficiency of the judicial system there is a second-order relationship.

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