The only way to grow? Italian business groups in historical perspective

This article analyses the dynamics of business groups (BG) formation and diffusion in Italy in the twentieth century. It shows that BGs is not an organisational form which characterizes only developing countries or economies in their very early stage of development. Indeed, in its evolution from a peripheral country to one of the most advanced economies, Italy has been constantly populated by BGs. One striking feature of the Italian corporate system is that BGs are present not only among large firms, but also in almost all the other forms of enterprise: cooperative firms, municipalised companies, state-owned enterprises (SOEs), and fast-growing medium-sized firms. Thus, BG seems to be the ‘only way to grow’ for Italian firms or, at least, the easiest way to reach a reasonable size. BG as a governance system looks particularly flexible, adapting itself to different ownership, market conditions and local contexts. In absence of obstacles of legal or fiscal nature, this flexibility is probably the main reason for its resilience.