International Joint Ventures in Italy: A Long-Term View

Veronica Binda and Mario Perugini

Moving on from the existing investigations, this paper focuses on a specific form of foreign direct investment – the joint-venture with a local partner – and aims to understand the reasons behind its establishment. In order to do so, the work deals with a country that received significant amounts of foreign capital during its history, Italy, and develops two different and complementary comparisons. The first one is among three different historical periods. International joint-ventures are observed: (a) during the economic expansion of the “Giolittian Era” (1901-1914), (b) in the Fascist years (including an autarkic period during the second part of the 1930s) and (c) in the years of the Italian “economic miracle” after World War Two. The second comparison is among sectors, such as basic metals (aluminium), chemicals, and machinery. Based on long-term case studies, we argue that, coherently with management studies, economic reasons and explanations do matter. On the other hand, we claim that the behaviour of companies in terms of formation and dissolution of joint-ventures can not be understood without considering the role of government intervention and industrial policy within the host country, as the Italian experience clearly shows. 

Paper: download PDF