Description:
The paper studies the structural robustness of Italian business system, using Covid-19 pandemic as an exogenous event to test it. The Receiver Operating Characteristics methodology, quite new for Economics, is used to classify firms based on their structural and behavioral characteristics. “Solid” firms are less than one fifth of Italian enterprises but represent the majority of employment and value added. “Fragile” and “Risky” firms, albeit much less relevant for the creation of value added, account for over one third of total employment, so that they are a worrisome issue for policy makers. Risky and Fragile conditions prevail among firms with smaller economic size (a broad definition of firm size) and among those operating in Construction and Other services. Moreover, factors such as firms’ performance, internal and external organization, play less a relevant role than economic size and digitalization/innovation in determining Italian firms’ solidity to shocks such as the Covid-19 one