Abstract The recent evolution of Italian capitalism shows the increasing relevance of large enterprises at three levels: the economic and institutional environment, the ownership structure, and the financing policy. A comparison of the financial structure of Italian large enterprises with those of other European countries (France, Germany, and Spain), using Bank for the Accounts of Companies Harmonised data, shows their financial fragility, where the prevalence of debt over equity justifies the still strong and close relationship between ownership control and management in their strategies and the prevalence of obsolete bank–firm relationships based on shortterm external finance and multiple business lendings. These factors slow down firms’ expansion and consequently the need for companies to grow so as to face the new global market. Finance is confirmed as a determinant of growth both in size and in organisation. We conclude that a pivotal role for the growth of Italian firms lies in a ‘‘revised’’ relationship between size, governance, and the firms’ financial structure. Keywords Corporate governance Firm performance JEL classification G32 G34 L25
On Large Enterprises: New Findings from a European Comparison
MONARCA, UMBERTO;
2008-01-01
Abstract
Abstract The recent evolution of Italian capitalism shows the increasing relevance of large enterprises at three levels: the economic and institutional environment, the ownership structure, and the financing policy. A comparison of the financial structure of Italian large enterprises with those of other European countries (France, Germany, and Spain), using Bank for the Accounts of Companies Harmonised data, shows their financial fragility, where the prevalence of debt over equity justifies the still strong and close relationship between ownership control and management in their strategies and the prevalence of obsolete bank–firm relationships based on shortterm external finance and multiple business lendings. These factors slow down firms’ expansion and consequently the need for companies to grow so as to face the new global market. Finance is confirmed as a determinant of growth both in size and in organisation. We conclude that a pivotal role for the growth of Italian firms lies in a ‘‘revised’’ relationship between size, governance, and the firms’ financial structure. Keywords Corporate governance Firm performance JEL classification G32 G34 L25I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
