Older firms drive Italy's rise in average business size
Italian firms' average employment rose from 8.03 to 9.72 employees between 2014 and 2024, mainly because the business population aged. Bank of Italy research links the change to declining entry and exit rates rather than stronger growth at a given firm age.
Larger firms through demographic change
Administrative microdata from Italy's National Social Security Institute (INPS) show employment rising from 12.65 million to 15.93 million between 2014 and 2024.
Firm numbers increased from 1.58 million to 1.64 million.
Average firm age rose from 11.8 to 13.3 years as entry rates fell from 11.9 to 8.1 percent and exit rates from 10.4 to 9.2 percent.
Size increased across sectors and regions; reallocations between them did not explain the aggregate increase.
Changes in the age distribution accounted for virtually all of it: holding that distribution at its 2014 level, average size would have declined.
The authors identify 53,076 high-growth firms, just over 7 percent of the reference population, accounting for about one-fifth of INPS employment in 2024.
Young firms dominate sustained expansion
High-growth firms combine five-year employment growth above the 75th percentile with a 2024 size at or above their sector's 75th percentile.
Linked Cerved accounts show they were about six years old before expansion, versus nearly 18 for other firms.
They were more productive, invested more, particularly in intangible assets, and participated more often in private equity and mergers and acquisitions.
These associations persist after controls.
The age-adjusted wage premium was about 3 percent before expansion and exceeded 6 percent afterward.
Size is not dynamism
The aggregate increase in size does not establish stronger business dynamism: demographic composition explains it.
The growth regressions describe associations, not causal effects.
Selection of firms surviving until 2024 limits their representativeness of the initial business population.