Networking and performance of BG

Below are the main research papers:

  •  Cainelli G., Giannini V., Iacobucci D. (2017), “Business groups and industrial district in North-East Italy”, in Economia e Società Regionale (2), ed. Franco Angeli. Doi.org/10.3280/ES2017-002008.

 
Abstract: The main aim of this paper is to provide a framework of the presence of business groups in the regions of North-East, with a particular focus on the manufacturing firms located within industrial districts. Both the industrial district and the business group represent alternative ways of networking. The main idea is that industrial districts and the belonging to business groups have supported firms during the economic and financial crisis, allowing the survival of less performing firms as well. Specifically, the analyses presented follow our hypothe- ses. After the shock caused by the Great Recession in 2008, surviving firms were those lo- cated within industrial districts or those belonging to groups.
 
 

  •  Cainelli G., Giannini V., Iacobucci D. (2017), “Business groups and the great recession in Italy”, in L'industria, Rivista di economia e politica industrial (3), ed. Il Mulino, pp. 365-384. Doi: 10.1430/88849.

 
Abstract: The main aim of this paper is to provide an analysis of the role and evolution of business groups in Italy over the last decade. The underlying idea of the research is that the belonging to a group offers to firms several benefits such as an easier access to the capital market. These benefits are specifically relevant in the case of real and financial shocks, such as those experienced by the Italian industrial system since the fall of 2008. These advantages allowed firms belonging to groups to raise their likelihood of survival, even in the case of low performance, thus softening the impact of market selection. The empirical analysis is based on ISTAT data about the population of Italian business groups and a sample of Italian manufacturing companies belonging to groups. The results of the empirical analysis are in line with our hypotheses. Firms belonging to groups showed a greater likelihood of survival, also because of the easier access to internal and external financial resources. Consequently, the weight of companies belonging to groups has grown over the period considered.
 
 

  •  Cainelli G., Giannini V., Iacobucci D., “Agglomeration, networking and the Great Recession”, Regional Studies, in revision.

 
Abstract: The aim of this paper is to analyse how and to what extent firms’ external relations, such as the belonging to a local cluster or to a business group, affect the probability of firm survival and economic performance after the Great Recession of 2008. Our main hypothesis is that belonging to a business group or to a local cluster will mitigate the selection effects determined by real and financial shocks and that only the more efficient units in ‘isolated’ firms will survive. This means that firms that are part of a group or are located within a local cluster can be expected to show a lower likelihood of failure, but also lower performance compared to standalone firms. Estimating instrumental variable econometric models and using a large dataset of 155,841 Italian manufacturing joint stock companies, 28,167 of which are part of a group, we test these hypotheses for the period 2005-2012. Our results confirm expectations.
Firms located in local clusters or that belong to a business group show higher rates of survival rate during the Great Recession compared to standalone firms. However, the latter show higher levels of performance in terms of growth and profitability.
 
 

  •  Cainelli G., Giannini V., Iacobucci D., “District Groups: theory and empirical evidences”, work in progress.

 
Abstract: Starting from the theory developed by the "Evolutionary Economic Geography" according to which the business development processes are influenced by the local context, the main aims of the following paper are: a) to provide an updated map of the presence and weight of district groups in Italy. This update is also interesting considering the impact of the financial crisis. b) To provide a more precise characterization of the district groups compared to nondistrict groups, both by clarifying the theoretical assumptions that justify this diversity, and by providing appropriate empirical evidences. Empirical analyses are based on a new dataset of Italian business groups in 2015, obtained from the AIDA database of Bureau Van Dijk. Findings are in line with our hypotheses. Business groups have increased their weight during the financial crisis, in particular this is evident for the district groups. Moreover, district groups may show a higher spatial concentration of their affiliated firms and a lower diversification of their portfolio activities compared to non-district groups.
 
 

  •  Cainelli G., Giannini V., Guzzini E., Iacobucci D., “Small business groups, bank financing and the great recession”, work in progress.

 
Abstract: The main aim of this paper is to analyse the presence and intensity of bank financial constraints in companies belonging to business groups compared to stand-alone companies. We consider the period 2010-2012 when the financial crisis and the subsequent recession determined a situation of severe credit crunch. The paper uses a dataset of Italian manufacturing firms that includes standalone firms and firms affiliated to business groups; the latter were detected using ownership information about joint stock companies taken from the AIDA database. Data refers to about 120,000 Italian manufacturing joint stock companies, of which 22,000 belonging to groups. We compare the financial constraints of companies and groups and analyse the characteristics of them. Our findings may be summarized in the following way: a) although the affiliation to a business group facilitates the access to bank financing, firms belonging to a business are less dependent on bank financing than standalone firms; b) the presence of an internal capital market is a substitute both for the decision to access bank financing and for the amount of such financing; c) when considering centralization versus decentralization in raising bank financing in business groups, there are no significant differences between the portfolio effect and the affiliation effect.