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Investment and investment financing in Italy: some evidence at the macro level

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Listed:
  • Claire Giordano

    (Bank of Italy)

  • Marco Marinucci

    (Bank of Italy)

  • Andrea Silvestrini

    (Banca d'Italia)

Abstract

We analyse the developments of investment and investment financing in Italy since 1995, based on data from national accounts and the flow of funds. The exceptional fall in investment after the global financial crisis in 2007 concerned all institutional sectors and asset categories. However, appropriately deflated data highlight the more intense fall of household capital expenditure. Consistently, on the asset side, construction was one of the most hard-hit capital goods; ICT and intangible investment instead weathered the double recession better. Focusing on investment financing, the eruption of the crisis caused a major contraction in the availability of external finance for non-financial corporations and households. Long-term loans to non-financial corporations became more important, crowding out their short-term counterparts. Also the weight of debt securities increased significantly, especially after 2008.

Suggested Citation

  • Claire Giordano & Marco Marinucci & Andrea Silvestrini, 2016. "Investment and investment financing in Italy: some evidence at the macro level," Questioni di Economia e Finanza (Occasional Papers) 307, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:opques:qef_307_16
    as

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    File URL: https://www.bancaditalia.it/pubblicazioni/qef/2016-0307/QEF_307_16.pdf
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    References listed on IDEAS

    as
    1. Matteo Accornero & Paolo Finaldi Russo & Giovanni Guazzarotti & Valentina Nigro, 2015. "First-time corporate bond issuers in Italy," Questioni di Economia e Finanza (Occasional Papers) 269, Bank of Italy, Economic Research and International Relations Area.
    2. Brent Neiman, 2014. "The Global Decline of the Labor Share," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(1), pages 61-103.
    3. Adrian Blundell-Wignall & Caroline Roulet, 2015. "Infrastructure versus other investments in the global economy and stagnation hypotheses: What do company data tell us?," OECD Journal: Financial Market Trends, OECD Publishing, vol. 2014(2), pages 7-45.
    4. Giorgio Albareto & Paolo Finaldi Russo, 2012. "Financial fragility and growth prospects: credit rationing during the crisis," Questioni di Economia e Finanza (Occasional Papers) 127, Bank of Italy, Economic Research and International Relations Area.
    5. International Monetary Fund, 2013. "Italy: Technical Note on the Financial Situation of Italian Households and Non-Financial Corporations and Risks to the Banking System," IMF Staff Country Reports 2013/348, International Monetary Fund.
    6. Fabio Busetti & Claire Giordano & Giordano Zevi, 2016. "The Drivers of Italy’s Investment Slump During the Double Recession," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 2(2), pages 143-165, July.
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    Cited by:

    1. Balázs Égert, 2021. "Investment in OECD Countries: a Primer," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 63(2), pages 200-223, June.
    2. Giordano, Claire & Marinucci, Marco & Silvestrini, Andrea, 2019. "The macro determinants of firms' and households' investment: Evidence from Italy," Economic Modelling, Elsevier, vol. 78(C), pages 118-133.
    3. Claire Giordano & Marco Marinucci & Andrea Silvestrini, 2022. "Assessing the usefulness of survey‐based data in forecasting firms' capital formation: Evidence from Italy," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 41(3), pages 491-513, April.
    4. Claire Giordano & Marco Marinucci & Andrea Silvestrini, 2021. "Forecasting corporate capital accumulation in Italy: the role of survey-based information," Questioni di Economia e Finanza (Occasional Papers) 596, Bank of Italy, Economic Research and International Relations Area.

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    More about this item

    Keywords

    gross fixed capital formation; investment financing; national accounts; financial accounts;
    All these keywords.

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • G01 - Financial Economics - - General - - - Financial Crises
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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