Intangible assets finance: a complementary or substitution effect between external and internal channels? Evidence from the Italian divide

Marianna Succurro

MPRA Paper from University Library of Munich, Germany

Abstract: The goal of this research is to verify whether, and to what extent, differences in the availability of both internal and external financial resources explain differences in intangible activity between the Centre-North and the South of Italy. The paper focuses on Italian manufacturing firms over the 2003-2010 period. The empirical evidence, based on a dynamic econometric model, shows that the effects of finance on intangible activity can be heterogeneous depending on firms’ relative size and geographic location. In the Centre-North, where access to financial markets is easier, firms rely on external funding to invest in intangible assets. By contrast, in Southern regions, where access to external finance is harder, firms invest in intangible activity by substituting external funds with internal resources. The empirical evidence suggests that below a certain level of per-capita GDP a substitution effect prevails between the two sources of finance. On the contrary, some complementary effect between external and internal finance would exist in more developed Italian regions.

Keywords: External Finance; Internal Finance; Intangibles; Italian Divide (search for similar items in EconPapers)
JEL-codes: C23 G20 G30 O30 (search for similar items in EconPapers)
Date: 2014-06-04
New Economics Papers: this item is included in nep-sbm
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