Size Transition in Italian SMEs: Which Role for the Ownership Type?

In this paper, we study size transition– namely, a shift from one size category to another, regardless of whether thechangeisinanupwardordownwarddirection–inItalianSMEs. Weinvestigatethedriversofsizetransition and, leveraging uponthetenetsofthebehavioralagencymodel, wefocusontheroleofownershiptype(familyversus corporation-owned SMEs) on the probability of an SME to move from one size category to another. Furthermore, we study the moderating role of the presence of a foreign owner and the group dimension. Using a sample of 86,708 Italian SMEs over the period 2014-2021, we find that family-owned SMEs are less likely to experiencesizetransitioncomparedtocorporation-ownedSMEs. Furthermore,resultssuggestthatthenumber of companies inthegroupweakensourmainrelationship. Finally, our post-hoc analyses show that downsizing and upsizing are driven by different determinants.