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Corporate Governance, Investment, Profitability and Insolvency Risk: Evidence from Italy

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  • Alessandra Amendola
  • Vincenzo Candila
  • Luca Sensini
  • Giuseppe Storti

Abstract

The research aims to study the structural and functional characteristics of food and beverage companies, focusing on corporate governance, investment and financing decisions, innovation, profitability, and risk of insolvency. The analysis is based on a mixed type investigation method carried out on a random stratified sample of 274 firms. The empirical findings reveal that a large prevalence of companies is owned by a single person or by a limited number of partners (often of the same family). Owners and their families centralize decision-making power. The prevalence of companies made investment in innovation. The investments are mainly financed (78%) by the self-financing or by shareholders' capital. The investigation of the causal relationships that link corporate risk, profitability, and the propensity to invest and innovate with the other explanatory variables of business management highlighted further significant aspects.  Keywords: Corporate governance, Investment, Performance, Innovation, Risk Management.

Suggested Citation

  • Alessandra Amendola & Vincenzo Candila & Luca Sensini & Giuseppe Storti, 2020. "Corporate Governance, Investment, Profitability and Insolvency Risk: Evidence from Italy," Advances in Management and Applied Economics, SCIENPRESS Ltd, vol. 10(4), pages 1-10.
    • Handle: RePEc:spt:admaec:v:10:y:2020:i:4:f:10_4_10
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    References listed on IDEAS

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    1. Fama, Eugene F & Jensen, Michael C, 1983. "Separation of Ownership and Control," Journal of Law and Economics, University of Chicago Press, vol. 26(2), pages 301-325, June.
    2. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    3. McConnell, John J. & Servaes, Henri, 1990. "Additional evidence on equity ownership and corporate value," Journal of Financial Economics, Elsevier, vol. 27(2), pages 595-612, October.
    4. Demsetz, Harold & Lehn, Kenneth, 1985. "The Structure of Corporate Ownership: Causes and Consequences," Journal of Political Economy, University of Chicago Press, vol. 93(6), pages 1155-1177, December.
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    Cited by:

    1. Luca Sensini & Maria Vazquez, 2023. "Effects of Working Capital Management on SME Profitability: Evidence from an Emerging Economy," International Journal of Business and Management, Canadian Center of Science and Education, vol. 16(4), pages 1-85, February.
    2. Yarong Chen & Luca Sensini & Maria Vazquez, 2021. "Determinants of Leverage in Emerging Markets: Empirical Evidence," International Journal of Economics and Financial Issues, Econjournals, vol. 11(2), pages 40-46.
    3. Enrique Diaz & Luca Sensini, 2020. "Entrepreneurial Orientation and Firm Performance: Evidence from Argentina," International Business Research, Canadian Center of Science and Education, vol. 13(8), pages 1-47, August.

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