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A counterfactual analysis of the bank-industry relationship in Italy, 1913-1936

Author

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  • Carlo Drago
  • Roberto Ricciuti
  • Alberto Rinaldi
  • Michelangelo Vasta

Abstract

Until the Banking reform in 1936, banks and industrial companies in Italy were strongly intertwined (both in terms on ownership and interlocking directorates). Using Imita.db – a large a dataset containing data on over 300,000 directors of Italian joint stock companies – this paper analyses what would have happened to the Italian corporate network in the years 1913, 1921, 1927 and 1936 if the “mixed banks” and their directors would have not been there. Our experiments show that new centers of the system would have emerged (financial and electricity and phone companies), confirming the interconnected nature of the Italian capitalism. We also analyze two industries, textiles and iron and steel, characterized by different labor-to-capital intensities to check for sectoral differences. Contrary to conventional wisdom, we find that local banks were important in funding both industries. Overall we call into question the role of mixed banks.

Suggested Citation

  • Carlo Drago & Roberto Ricciuti & Alberto Rinaldi & Michelangelo Vasta, 2013. "A counterfactual analysis of the bank-industry relationship in Italy, 1913-1936," Department of Economics (DEMB) 0013, University of Modena and Reggio Emilia, Department of Economics "Marco Biagi".
    • Handle: RePEc:mod:dembwp:0013
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    References listed on IDEAS

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    6. Rinaldi, Alberto & Vasta, Michelanelo, 2005. "The Structure of Italian Capitalism, 1952 1972: New Evidence Using the Interlocking Directorates Technique," Financial History Review, Cambridge University Press, vol. 12(02), pages 173-198, October.
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    8. Renato Giannetti & Michelangelo Vasta (ed.), 2006. "Evolution of Italian Enterprises in the 20th Century," Contributions to Economics, Springer, number 978-3-7908-1712-6, December.
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    1. Drago, Carlo & Millo, Francesco & Ricciuti, Roberto & Santella, Paolo, 2015. "Corporate governance reforms, interlocking directorship and company performance in Italy," International Review of Law and Economics, Elsevier, vol. 41(C), pages 38-49.
    2. Michelangelo Vasta & Carlo Drago & Roberto Ricciuti & Alberto Rinaldi, 2017. "Reassessing the bank–industry relationship in Italy, 1913–1936: a counterfactual analysis," Cliometrica, Springer;Cliometric Society (Association Francaise de Cliométrie), vol. 11(2), pages 183-216, May.

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    corporate governance; economic history; network analysis;
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