Enhancing micro‐enterprises performance: The role of the regional environment

This paper investigates the impact of the regional environment on firm performance,focusing on a sample of 97,838 manufacturing firms in Italy. Utilizing multilevelmodeling, the study reveals several key findings. First, the regional context explainsapproximately 10% of the variability in firm performance. Second, micro-enterprisesdemonstrate lower performance levels compared to larger counterparts. Third, amore competitive regional environment is associated with higher firm performanceacross all sizes of firms. Importantly, micro-enterprises tend to benefit relatively morein competitive regions, leading to a narrowing performance gap with larger firms.These findings underscore the importance of policy initiatives aimed at enhancingregional competitiveness, particularly in supporting micro-enterprises to address theirinherent weaknesses and improve overall performance