Agata Maida (University of Milan)
Filippo Passerini and Daniela Sonedda
This paper examines the effect of small firms' scaling on productivity and profitability using firm-level data combined with matched employer-employee data. To address endogeneity, we apply an instrumental variable approach, leveraging the 2012 Fornero apprenticeship reform, which introduced a mentoring scheme for apprentices and incentivized firms to have a specified percentage of employees as apprentices based on pre-reform size. Exploiting the reforms exogenous thresholds, we find that scaling leads to increased hiring and apprenticeship contracts. However, value added, revenues, and capital rise less proportionally while operational measures and total factor productivity are unaffected, indicating no efficiency improvement.