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Companies' insolvency and ‘the nature of the firm’ in Italy, 1920s–70s1

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  • PAOLO DI MARTINO
  • MICHELANGELO VASTA

Abstract

This article analyses the functioning of Italian insolvency laws and practices, in particular their role in the selection and relaunch of viable firms. The article investigates the period between the 1920s and the 1970s, and focuses on joint‐stock companies. Using comparative data on the number of cases, we show that in Italy firms mainly used the procedure called fallimento (bankruptcy), consisting of the collection and subsequent liquidation of assets. Other procedures, such as deals with creditors or forms of receivership, able to give companies a further chance, were rarely used. On the basis of archival documents we maintain that this result was due to the strictness and complication of Italian procedures, as well as to their inability to select viable companies. The article also investigates the relation between the features of insolvency law and the nature of the Italian industrial system, specifically the peculiar small size and rapid turnover of joint‐stock companies. We suggest that the pro‐liquidation character of the insolvency law might have been one of the causes of the peculiarity of Italian industrial capitalism, even if the opposite direction of causality cannot be excluded.

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  • Paolo Di Martino & Michelangelo Vasta, 2010. "Companies' insolvency and ‘the nature of the firm’ in Italy, 1920s–70s1," Economic History Review, Economic History Society, vol. 63(1), pages 137-164, February.
    • Handle: RePEc:bla:ehsrev:v:63:y:2010:i:1:p:137-164
    DOI: 10.1111/j.1468-0289.2009.00481.x
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    Cited by:

    1. Paolo Di Martino & Michelangelo Vasta, 2012. "Happy 150th Birthday Italy? Institutions and Economic Performance Since 1861," Department of Economics University of Siena 662, Department of Economics, University of Siena.
    2. Felice, Emanuele & Vecchi, Giovanni, 2015. "Italy’s Modern Economic Growth, 1861–2011," Enterprise & Society, Cambridge University Press, vol. 16(2), pages 225-248, June.
    3. Colli, Andrea & Rinaldi, Alberto, 2015. "Institutions, Politics, and the Corporate Economy," Enterprise & Society, Cambridge University Press, vol. 16(2), pages 249-269, June.

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