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The economic and financial situation of Italian non financial corporations: an international comparison

Author

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  • Antonio De Socio

    (Banca d'Italia)

Abstract

The paper analyses the main differences in the financial structure of Italian and European non financial corporations in the 2004-2007 period, that is during the years before the financial crisis. The research is based on individual balance sheets of Amadeus (Analyse Major Databases from European Sources) database, which allow to isolate the effects of the different sectional and dimensional composition on the differences of the balance sheets ratios and to identify the more fragile firms. Italian non financial corporations present many factors of weakness compared to European ones. Firstly they are characterised by a lower operating income, even if in the period under analysis they obtained a slightly higher increase in turnover. Secondly a high indebtedness, with respect both to turnover and to risk capital, gives rise to a bigger impact of interest payments. Moreover the weight of short-term debt for Italian firms is higher and the availability of liquid assets is lower. Finally the percentage of commercial debt on assets is quite high. Taking all into account, the financial fragility is confirmed by the higher share of Italian firms which are vulnerable compared to European average.

Suggested Citation

  • Antonio De Socio, 2010. "The economic and financial situation of Italian non financial corporations: an international comparison," Questioni di Economia e Finanza (Occasional Papers) 66, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:opques:qef_66_10
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    File URL: https://www.bancaditalia.it/pubblicazioni/qef/2010-0066/QEF_66.pdf
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    Citations

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    Cited by:

    1. Umberto Filotto & Claudio Giannotti & Gianluca Mattarocci & Xenia Scimone, 2021. "The Influence of Macro factors On Residential Mortgage In Italy," International Journal of Business Research and Management (IJBRM), Computer Science Journals (CSC Journals), vol. 12(3), pages 103-115, June.
    2. Antonio De Socio & Valentina Nigro, 2012. "Does corporate taxation affect cross-country firm leverage?," Temi di discussione (Economic working papers) 889, Bank of Italy, Economic Research and International Relations Area.
    3. Dottori, Davide & Micucci, Giacinto & Sigalotti, Laura, 2024. "Trade debts and bank lending in years of crisis," International Review of Financial Analysis, Elsevier, vol. 92(C).

    More about this item

    Keywords

    profitability; indebtedness; financial structure;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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