Financing industrial districts in Italy, 1971-1991: a private venture?

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Abstract

This article investigates financial subsidies were significant in the development of Italian ID. The analysis of the capital structure shows that companies in both ID, the Southern ID of Barletta and the North-eastern ID of San Mauro Pascoli, benefited from state subsidies, but these were a far larger source of finance for companies in the Southern ID. Subsidized loans, grants and fiscal subsidies extended to companies in the Southern sample were not only extended more frequently, but were also larger in absolute terms. The analysis of the relative weight of subsidies to small- and medium-sized enterprises (SME), both in the Southern and North-Eastern samples, confirms the thesis concerning the non-neutrality of the state in the capitalist pattern. According to the thesis, the North and Centre benefited more from subsidies to SME than the South, but this is not confirmed either by the analysis of the capital structure of the two ID or by the Bank of Italy sample. Firms in the North-Eastern sample benefited from financial subsidies to a lesser, but still significant extent. Credit from local banks, included in the short-term bank credit, represents a significant share of companies' liabilities. If the analysis of the capital structure confirms the variety of sources of finance utilized by companies within the two ID samples, it also confirms the importance of internally generated funds. The great relative weight of state subsidies as a source of finance for companies in the Barletta ID indicates that subsidies might have played a considerable role in promoting the growth of these firms in the South.
Original languageEnglish
Pages (from-to)569-593
Number of pages26
JournalBusiness History
Volume47
Issue number4
DOIs
Publication statusPublished - 31 Oct 2005

Keywords

  • Economic performance
  • Italy
  • industrial districts
  • north-south economic divide

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