Abstract: State Subsidies and the Sources of Company Finance in Italian Industrial Districts, 1951-1991

Anna Spadavecchia


Works on Italian Industrial Districts (IDs) stress the private origin of their capital. This view—based on many studies of Northeastern IDs—implicitly denies the potential significance of other sources of finance, such as state subsidies available to small and medium enterprises (SMEs) from the 1950s onward. This thesis brings Southern Italy into the broader picture of Italian IDs and tests whether IDs can emerge through state intervention as well as through private finance. The issue is analyzed from the institutional perspective as well as from that of the recipient firms. The former includes the comparison of financial subsidies to SMEs available through regional and national industrial policies and highlights the greater extent to which the South benefited from subsidized loans and grants. The recipient perspective uses two IDs, one from the South and one from the Northeast. The firms' capital structure confirms the greater reliance of Southern companies on subsidies. However, contrary to the dominant view, companies in the Northeastern ID also made significant use of market and state finance. These findings are important for the international literature on IDs, which often overlooks the special attention paid to SMEs' financial requirements in Italy since the 1950s.