Ownership, Governance, Management and Firm Performance: Evidence from Italian Firms

39 Pages Posted: 22 Apr 2022

Date Written: March 16, 2022

Abstract

We explore the role of ownership, governance and management characteristics as potential drivers of the performance gaps between firms located in the Centre and North and in the South of Italy. First, we document that southern firms are characterized by more frequent family ownership and a higher fraction of local and family directors on the board. Moreover, entrepreneurs and managers of southern firms have lower education levels and are less inclined to adopt structured managerial practices and advanced technology. Second, we examine to what extent these differences account for the performance gap between the two areas. We find that managers’ human capital explains one tenth of the difference in firm size, while family ownership accounts for one tenth of the differences in productivity. Although the analysis is purely descriptive, our findings suggest that ownership, governance and management play a significant role in explaining firm performance and account for a non-negligible fraction of the North-South divide.

Keywords: ownership, family firms, corporate governance, managerial practices, human capital, firm size, productivity, technology

JEL Classification: G30, L20, M10

Suggested Citation

Baltrunaite, Audinga and Formai, Sara and Linarello, Andrea and Mocetti, Sauro, Ownership, Governance, Management and Firm Performance: Evidence from Italian Firms (March 16, 2022). Bank of Italy Occasional Paper No. 678, Available at SSRN: https://ssrn.com/abstract=4090769 or http://dx.doi.org/10.2139/ssrn.4090769

Audinga Baltrunaite

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Sara Formai

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Andrea Linarello (Contact Author)

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Sauro Mocetti

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

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