## 2 Materials and Methods
### Data
\begin{table}
\begin{tabular}{l c c c c c c c} \hline \hline \multirow{2}{*}{**Region**} & \multicolumn{2}{c}{**SMEs**} & \multicolumn{2}{c}{**Large Firms**} & \multicolumn{2}{c}{**Total Firms**} & \multicolumn{1}{c}{**Population**} \\ \cline{2-9}  & **\#** & **\%** & **\#** & **\%** & **\#** & **Regional Share** & **Density** \\ \hline
**Panel A: Portugal** & & & & & & & \\ North & 16 & 34.0\% & 1 & 2.1\% & 17 & 36.2\% & 167.9 \\ Center & 8 & 17.0\% & 0 & 0.0\% & 8 & 17.0\% & 78.6 \\ Lisbon & 14 & 29.8\% & 2 & 4.3\% & 16 & 34.0\% & 946.8 \\ Alentejo & 3 & 6.4\% & 0 & 0.0\% & 3 & 6.4\% & 22.3 \\ Algarve & 1 & 2.1\% & 0 & 0.0\% & 1 & 2.1\% & 87.8 \\ Azores & 1 & 2.1\% & 0 & 0.0\% & 1 & 2.1\% & 104.6 \\ Madeira & 1 & 2.1\% & 0 & 0.0\% & 1 & 2.1\% & 317.0 \\ \hline
**Total** & **44** & **93.6\%** & 3 & **6.4\%** & 47 & **100.0\%** & **-** \\ \hline
**Panel B: Spain** & & & & & & & \\ Andalusia & 24 & 13.9\% & 0 & 0.0\% & 24 & 13.9\% & 97 \\ Aragon & 12 & 6.9\% & 0 & 0.0\% & 12 & 6.9\% & 28 \\ Asturias & 2 & 1.2\% & 0 & 0.0\% & 2 & 1.2\% & 96 \\ Balearic & 4 & 2.3\% & 0 & 0.0\% & 4 & 2.3\% & 243 \\ Islands & 8 & 4.6\% & 0 & 0.0\% & 8 & 4.6\% & 300 \\ Cantabria & 1 & 0.6\% & 0 & 0.0\% & 1 & 0.6\% & 109 \\ Castilla y Leon & 10 & 5.8\% & 0 & 0.0\% & 10 & 5.8\% & 25 \\ Castilla-la- & 7 & 4.1\% & 0 & 0.0\% & 7 & 4.1\% & 26 \\ Catalonia & 31 & 17.9\% & 0 & 0.0\% & 31 & 17.9\% & 238 \\ Valencian & 19 & 11.0\% & 1 & 0.6\% & 20 & 11.6\% & 216 \\ community & & & & & & & \\ Extremadura & 2 & 1.2\% & 0 & 0.0\% & 2 & 1.2\% & 26 \\ Galicia & 13 & 7.5\% & 0 & 0.0\% & 13 & 7.5\% & 91 \\ La Rioja & 3 & 1.7\% & 0 & 0.0\% & 3 & 1.7\% & 63 \\ Madrid & 17 & 9.8\% & 1 & 0.6\% & 18 & 10.4\% & 840 \\ Murcia & 8 & 4.6\% & 0 & 0.0\% & 8 & 4.6\% & 133 \\ Navarra & 4 & 2.3\% & 0 & 0.0\% & 4 & 2.3\% & 63 \\ Basque country & 6 & 3.5\% & 0 & 0.0\% & 6 & 3.5\% & 303 \\ \hline
**Total** & **171** & **98.8\%** & 2 & **1.2\%** & **173** & **100.0\%** & **-** \\ \hline \hline \end{tabular} Source: Number of firms collected from SABI database. Population density (individuals per km2) collected from Pordata to the Portuguese sample and from Datosmacro.com to the Spanish sample.  
\end{table} 
Table 1: Sample characterization. Analyzing Table 2, the following facts emerge to Portugal: (1) the northern region, in which most of the firms of our sample are located, presents the highest values of total assets, total equity, and sales (in mean). (2) The greater net income (in mean) is in Lisbon, the region with more population density. It is also the region where firms employ more people (69.82). (3) Firms located in Alentejo, Azores, and Madeira have, in mean, losses. Although, these regions have few companies operating in the swerage sector. Moreover, Alentejo is a region with fewer habitants per square kilometer, and Madeira and Azores are two islands. (4) Azores only have one private firm operating in the swerage sector, but in the mean is the older firm. Most of the firms in this sector are young firms. (5) Madeira only has one active firm, which was created during the period analyzed. (6) In Alentejo, the number of workers is less than one (0.33 in mean) since the information from the SABI database is that some firms have no employees, which may be because they subcontract services and have other activities. In Spain, the region of Madrid presents the highest values of total assets, total equity, net income, sales, number of employees, and age (in mean). These facts can be explained due to the population density as well as the existence of a large-size company. In the opposite relation is Cantabria region with the worse financial situation but have only one company operating in this sector. Comparing the two countries, while in Portugal there are huge differences among regions, in Spain, the difference between the regions with worse and better financial situations is less evident. Moreover, Portuguese firms in some regions have losses (negative net income), while the Spanish counterparts have (in mean) profits.