Reassessing the capital structure of the largest Italian firms: banks, markets and inter-firm funding, 1950-1970

The historical relevance of inter-firm credit relations has frequently been pointed out when considering small- and medium-sized enterprises, especially those operating in industrial districts. This paper aims to provide a relatively different perspective on the ways in which firms actually financed their working capital and longer-term investments during the Golden Age, which was characterised in Europe by high growth rates. The paper reconstructs and analyses the capital structure of from 140 to more than 180 large Italian firms, belonging to both manufacturing and services sectors, from 1950 to 1970. Relying upon an original and new dataset, the paper deals with a relatively broad sample of largest listed firms and provides interesting empirical evidence with regard to the major trends in the capital structure of top Italian firms for a period of twenty years. It confirms some previous findings and adds some specification to the general features, encouraging to revise the current assessments of the capital structures of firms and how they actually fund their working capital and long-term investments.