LIQUIDITY CONSTRAINTS AND SMALL FIRMS' GROWTH

There is general agreement on the difference, in terms of efficiency, between small firms in southern and northern Italy (see Prosperetti and Varetto, 1991; Giannola and Sarno, 1996; Giannola, Papagni and Sarno, 1998; Sarno, 1999). As far as technical efficiency is concerned (that is the ability to generate output from a given amount of factors of production) there appears, over the years, a persistent, huge differential (around 30 per cent) in favour of Northern firms. These findings (Giannola and Sarno, 1996; Giannola, Sarno and Papagni, 1998) show that Southern firms are not in a position to exploit economies of scale as northern firms do. The fact that firms’ size in the Mezzogiorno, for different size classes, is systematically smaller than in the rest of Italy, is a particular feature that seems to have major consequences. When the analysis shifts from technical to economic efficiency (i.e., the ability to combine the factors of production so as to equalize the weighted marginal productivity of factors), the gap between southern and northern firms in the level of production costs is dramatically reduced (ranging from 6 to 10 per cent). These results suggest that the North-South gap is not so much related to a specific inefficiency, but to the smaller size of southern firms that does not allow them to profit from returns to scale to the same extent. A possible conclusion (with relevant policy implications) is that the root of many problems of southern firms lies in the obstacles that prevent them from growing to reach an adequate operating size. A related implication is that the southern industrial structure, due to its size characteristics, is more easily affected by monetary policy and the economic cycle (Gertler and Gilchrist, 1991; 1993) The difficulties faced by southern firms become evident if we look at the evolution of the Italian manufacturing industry during the 1990s. For this purpose, we can proceed by considering a sample of firms which is representative of the entire population from a sectoral, dimensional and geographical standpoint. During the 1990s there was an overall decline in average firm size in Italian across all size classes. This is particularly marked for southern firms, in which firms’ size in 1990 was already significantly below average; by 1994 this character was considerably accentuated and was confirmed in 1997; by contrast, average northern Italian firm size showed a major increase in 1997. Moreover, the less pronounced and less persistent decline of the average size did not prevent Northern firms from expanding sales in the period in hand; this is due to the rapid growth of exports that followed the 1992 devaluation of the Italian lira. In the same period, in the Mezzogiorno, sales of local firms show a persistent and significant decline. As a consequence, the dynamics of the productivity of labour was negative (or stagnant) in the South, while it steadily grew in the rest of the country. Southern firms, while experiencing at the end of the period some significant progress in penetrating foreign markets, faced increased competition on the domestic market due to the contraction in aggregate demand, severely affected by the restrictive stance of the macroeconomic policy. All in all, these data illustrate the weakness (if not the worsening) of the competitive position of manufacturing firms in the South

Quando le banche si incontrano. Dall’interbancario al mercato interno dei capitali

Questa nota propone un’ analisi del processo di concentrazione bancaria via acquisizioni tesa a valutare gli effetti che accompagnano un’ acquisizione di una banca ad opera di altra banca, nel caso che esse operino su mercati distinti (qui identificati come Nord e Sud). Ceteris paribus, a meno di non ipotizzare assoluta omogeneità ed identità strutturale delle condizioni vigenti sui due mercati, la fusione per acquisizione lungi dal risultare neutrale di norma penalizzerà la clientela dell’ area strutturalmente più debole. In presenza di diversi caratteri strutturali dei due mercati, la creazione di un mercato interno dei capitali e una normale razionalità operativa aziendale portano con ineluttabile semplicità a questo esito; il che prospetta anche una risposta univoca sui possibili esiti della fusione. Di norma, invece, le argomentazioni proposte (ad esempio l’ approccio del relationship banking, quello delle distanze funzionali, ecc.) privilegiano un atteggiamento aperto a tutte le soluzioni, ed, evitando di azzardare previsioni “generali”, rinviano agli esiti di più o meno sofisticate verifiche empiriche che divengono, per così dire, arbitre dei destini della teoria. L’ approccio qui adottato, volutamente ed estremamente meccanico, prospetta invece conseguenze univoche che si realizzano anche adottando ipotesi di base estreme favorevoli alla convalida di quella “neutralità positiva” che la tesi ortodossa ama attribuire al cosiddetto processo di consolidamento bancario e il cui fondamento logico si intende invece mettere in discussione

Deregulation e tutela del consumatore nei servizi pubblici

Nell'ambito dei processi di privatizzazione, il problema del recupero di efficacia/efficienza non si puo' proporre in termini semplicistici di deregolamentazione selvaggia, ma va inquadrato nel nuovo ruolo complessivo che lo Stato deve assumere di garante e controllore del corretto funzionamento dei meccanismi di mercato

Finance without financiers

In response to the financial crisis of 2007 – 2009, governments in the United States, Europe and elsewhere have invested billions of dollars in financial institutions to prevent them from going bankrupt and from further disrupting the global economy. Despite these massive public bail-outs, a government and "elite" consensus has emerged that these nationalized or quasi-nationalized financial institutions should be privatized as soon as possible, and that, apart from modest changes in financial regulation, our economies should return to the status quo ante financial structure as soon as possible. In short, despite a massively disruptive economic crisis caused by financiers, our best option as a society is to return to a financial system run by these financiers. We disagree. As the crisis reveals, financier dominated finance has a number of crucial flaws: it creates major externalities that contribute to financial and real economic instability; it promotes short-term investment strategies; it contributes to inequality; and it undermines economic efficiency and the achievement of social goals in the real economy. We argue that a better strategy for achieving economic recovery, restructuring and widely shared, sustainable prosperity is to use public investments in the financial sector to build on the successful Post-World War II experiences of publicly oriented financial institutions in Europe and the US to create a stronger presence of "finance without financiers". We provide case studies of the positive and negative experiences with publicly owned and controlled financial institutions in the United States, France, Germany and Italy, and draw lessons for successfully creating more publicly oriented financial institutions moving forward. We emphasize local differences, policy space and "social management" of these financial institutions to ensure that publicly owned financial institutions is, at the same time, genuinely publicly oriented institutions that fit local conditions.In response to the financial crisis of 2007 – 2009, governments in the United States, Europe and elsewhere have invested billions of dollars in financial institutions to prevent them from going bankrupt and from further disrupting the global economy. Despite these massive public bail-outs, a government and "elite" consensus has emerged that these nationalized or quasi-nationalized financial institutions should be privatized as soon as possible, and that, apart from modest changes in financial regulation, our economies should return to the status quo ante financial structure as soon as possible. In short, despite a massively disruptive economic crisis caused by financiers, our best option as a society is to return to a financial system run by these financiers. We disagree. As the crisis reveals, financier dominated finance has a number of crucial flaws: it creates major externalities that contribute to financial and real economic instability; it promotes short-term investment strategies; it contributes to inequality; and it undermines economic efficiency and the achievement of social goals in the real economy. We argue that a better strategy for achieving economic recovery, restructuring and widely shared, sustainable prosperity is to use public investments in the financial sector to build on the successful Post-World War II experiences of publicly oriented financial institutions in Europe and the US to create a stronger presence of "finance without financiers". We provide case studies of the positive and negative experiences with publicly owned and controlled financial institutions in the United States, France, Germany and Italy, and draw lessons for successfully creating more publicly oriented financial institutions moving forward. We emphasize local differences, policy space and "social management" of these financial institutions to ensure that publicly owned financial institutions is, at the same time, genuinely publicly oriented institutions that fit local conditions

Net fiscal flows and interregional redistribution in Italy: a long run perspective (1951-2010)

This paper carries out a long-run reconstruction of the pattern of interregional redistribution in Italy operated through fiscal imbalances. In particular, by resorting to different sources, a discontinuous time series of Net Fiscal Flows for Italian regions and macro-regions from 1951 to 2010 is built up. The evidence collected is the basis to put forward both an assessment on the intensity and adequacy of redistribution, and an evaluation of the actual relationship between the deepening of Southern fiscal imbalance and the implementation of regional policies. On the first point, the main result of the paper is that, although the amount of resources transferred to Southern Italy from the rest of the country has been significant and increasing over time (at least up to the end of the 1990s), redistribution cannot be judged disproportionately large, in the light of income differences among regions, the public commitment in regional policies and the constitutional principles of equal access of citizens to the basic public services. Secondly, the analysis of data and the inspection of facts indicate that the relationship between the intensity of interregional redistribution and the effort of regional policies is definitely weak. This supports the view that increasing NFFs have little served the purpose of regional convergence; rather, the rise of imbalances seems to be mainly connected to the overall escalation of public expenditure, following the institutional break occurred in mid-1970s with the establishment of Regional Governments