Private and State-Owned Listed Firms: a decision tree analysis in the Italian setting

The relationship between ownership structure (private vs State-owned) and company performance has been deeply analyzed by scholars and practitioners. Prior studies found mixed results about this topic; some scholars demonstrated that private firms perform better than State-Owned Enterprises and others came to opposite or undefined results. Further, during the global financial crisis, this topic gained relevance. To the best of our knowledge, Italian framework suffers of a lack of these studies. Furthermore, no studies classify private and State-owned firms on the basis of the decision tree approach. The main aim of this paper is thus to classify private Italian listed companies and State-owned Italian listed companies by using a decision tree classification approach. To do so, we performed a decision tree classification analysis on a sample of 18 State-owned listed firms and 212 private listed firms. Empirical results show that the most relevant financial values that stakeholders can rely in order to classify private and State-owned Italian listed firms are total debt, net sales and total assets.