Size and Strategy of Italian Industrial Enterprises (1907-1940): Empirical Evidence and Some Conjectures

Conventional wisdom concerning Italian industry does not fitwell into the general scheme of the Second Industrial Revolutionas constituted by the growth and diffusion of large-size enterprises.This wisdom held that Italian industry was dominated by a smallgroup of large enterprises as a direct consequence of the country'sbackwardness. These enterprises were weak giants, unable toattain the dynamic advantages usually reaped by such organizations.Such interpretations have been generally based on qualitativeevidence because the quantitative evidence is very scanty. Theolder studies suggest a very high concentration, while recentstudies stress the evidence of scale economies and market imperfections.Neither result is convincing for technical reasons. This papertherefore aims at a reassessment based on a newly constructeddatabase of Italian joint stock companies. This evidence doesnot support the traditional view. Rather, it indicated thatconcentration indices are fairly low and that they do not growover the period, the bulk of the firms being of medium sizeand the giant companies few. Although such a situation couldbe attributed to Italian backwardness, the paper concludes thatthis view is too simplistic. It concludes by showing how successfulItalian companies have been able to take advantage of theirsize by means of flexible strategies.