Abstract: Financing Industrial Districts in Italy, 1971-1991. A Private Venture?

Anna Spadavecchia

Abstract

The dominant view about Italian Industrial Districts (IDs) suggests that firms within IDs finance themselves through internal sources alone. This view, based on Northeastern Ids—on which the mainstream literature concentrates—implicitly denies any potential role played by state subsidies available to SMEs through national and regional industrial policies from the 1950s onward. This paper, focusing on a Southern ID, tests whether IDs can also emerge within the context of state intervention, and whether Southern IDs, in contrast to Northeastern IDs, relied more heavily on state funding. The paper uses company reports and balance sheets of two samples of SMEs: 32 in the Southern ID of Barletta and 22 in San Mauro Pascoli, a ‘classic' ID in the Northeast. The analysis of the capital structure of these companies confirms a greater reliance of Southern companies on subsidies. However, another interesting point emerges; contrary to the dominant view, companies in the Northeastern sample did not rely on internal finance alone, as they made significant use of market capital.