On large enterprises: new findings from a European comparison |
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Authors: | Giovanna Morelli Umberto Monarca |
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Institution: | (1) University of Teramo, Teramo, Italy;(2) University of Foggia, Foggia, Italy |
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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 short-term 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. |
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Keywords: | Corporate governance Firm performance |
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