2014
Article
Journal of Modern Italian Studies

Corporate Governance and the Financial Crisis in Italy

Format:Print

Abstract

The financial crisis hit Italy harder than many other Eurozone countries. In part this was due to the fact that the crisis came upon a system that was weakened by years of sub-par economic growth. One of the several endogenous factors that explain the stagnation of the Italian economy is the weak corporate governance in the industrial sector and parts of the financial one. A framework that was designed to maintain stability in the ownership of companies and of certain types of banking institutions ultimately led to an inefficient allocation of capital and to a lack of investment, which contributed to the loss of competitiveness of Italian firms in a fast globalizing marketplace.