New firm formation and local development: the Italian experience

Abstract

The paper deals with regional differentiation in new firm formation in Italy during the second half of the 1980s. The paper surveys the theoretical hypotheses to be tested and analyses the problem of the choice of socio-economic variables which must be examined. The results of the regression analysis prove that production structure, firms' size, social structure and professional employment structure are the most important explanatory variables for new firm formation (and for its regional differentiation). All this underlines the strong relationship between socioeconomic environment and local development, stressing the role of external economies and emphasizing the good opportunities for endogenous development processes.