Abstract: Business Forms, Capital Democratization and Innovation: Milan in the 1850s
Lombardy's economy in the 1850s was characterized by extensive networks of personal relations, credit by trust, and family businesses. Milan's wealth was maximized by maintaining the mercantile identity of the city, while manufacturing innovation was pursued only when economically profitable or strategic to further growth. Thanks to a sample including extensive data on almost two hundred firms in existence in Milan from 1852 to 1861, it is possible to reconstruct the mechanisms governing this economy: how liquidity was collected and distributed, how partnerships were formed, inside which social circles partners were found, how much kinship ties determined business decisions, what criteria proved relevant in the investment decision-making processes, how innovation and entrepreneurship were rewarded. The picture emerging from the sample will vindicate the capacity of Milan's mercantile elite to foster innovation through the efficient allocation of capital and the creation of entrepreneurial capital, averting at the same time disastrous financial crises: the solid base of the successive development of the region.