Certification, Not Transformation: The Performance Signature of Italy's Innovative-Firm Status and Its Regional Contingency

Italy's special legal status for "innovative" small and medium-sized enterprises (SMEs) grants fiscal, financial and administrative benefits intended to strengthen competitiveness, yet whether the status marks a distinctive profile of realised firm performance remains empirically underexplored. Using ten years of balance-sheet data assembled within the LUCE (LUtech Campus Ecosystem) research project on 4,043 firms (2,873 innovative and 1,170 ordinary), we compare the two populations across six performance dimensions—performance persistence, revenue growth, labour productivity, operating profitability, earnings volatility and financial stability. Because the populations differ systematically in size, sector and location, we use propensity-score matching (1,031 balanced pairs) and interpret the resulting differential as a conditional innovative-status premium rather than as a causal effect. Innovative SMEs display a large and robust revenue-growth premium—a median growth rate roughly three-and-a-half times that of matched ordinary peers (+17.3 percentage points per year; rank-biserial 0.53)—coexisting with a fragility penalty of higher earnings volatility and lower financial stability; operating profitability is higher but does not survive our robustness battery, and labour productivity is marginally lower. A within-firm event study around the registration date shows that the growth advantage largely predates registration, indicating that the status certifies and renders visible already-dynamic firms rather than causally upgrading them. The premium is strongly and significantly heterogeneous across space—broadest in the South, where local institutions are weakest—consistent with an institutional-substitution boundary condition that a formal region-by-status interaction confirms. The results are robust to nine alternative estimators, multiple-testing correction and hidden-bias diagnostics. We read the innovative-firm register as an informative screening and monitoring device rather than as a policy whose causal returns we measure.