Italian Corporate Governance, Investment, and Finance
Italian industrial structure and financial markets have several distinct features. Italian firms are relatively small, few trade publicly and no corporate bond market exists. The limited types of external funds available to Italian firms makes them prone to financing constraints. We examine a panel containing over 1100 Italian firms. We find that firm size does not appear correlated with the severity of financing constraints. We also find that small firms are frequently mature. Our results suggest that young firms face financing constraints, while mature firms may develop relationships with lenders that lower the costs of external funds. Small, young firms appear to face the tightest financing constraints. Many firms are affiliated with pyramidal business groups. We find that affiliation with pyramidal business groups appears to reduce the effect of financing constraints. Our results have important implications for government policy to promote small firm growth in Italy.
|Length:||33 pages Keywords : business groups, cash flow, corporate investment, capital structure, panel data|
|Date of creation:||Dec 2000|
|Contact details of provider:|| Postal: Via Real Collegio, 30 10024 - Moncalieri TO|
Web page: http://www.ceris.cnr.it/
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- Stephen Bond & Julie Elston & Jacques Mairesse & Benoit Mulkay, 1997.
"Financial Factors and Investment in Belgium, France, Germany and the UK:A Comparison Using Company Panel Data,"
NBER Working Papers
5900, National Bureau of Economic Research, Inc.
- Steve Bond & Julie Elston & Jacques Mairesse & Benoit Mulkay, 1997. "Financial factors and investment in Belgium, France, German and the UK: A comparison using company panel data," IFS Working Papers W97/08, Institute for Fiscal Studies.
- Stephen Bond & Julie Ann Elston & Jacques Mairesse & Benoît Mulkay, 1999. "Financial Factors and Investment in Belgium, France, Germany and the UK : A Comparison using Company Panel Data," Working Papers 99-64, Centre de Recherche en Economie et Statistique.
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