Alfio Cariola

The influence of local institutional differences on the capital structure of SMEs: Evidence from Italy

This paper explains both capital-structure and debt-maturity choices for SMEs in terms of institutional differences at the local level, making use of regions as the unit of analysis. Specifically, the article considers local financial development and the effectiveness of the local enforcement system, controlling for firm-specific characteristics. The ability of the local financial market to provide funds efficiently is of particular interest to SMEs, due to the fact that large firms can tolerate imperfections in the local financial system by moving to international, more highly integrated financial markets. The main findings of the analysis suggest that capital-structure and debt-maturity choices interact as complementary factors and that corporate financial decisions are not only the result of firm-specific or industry-specific characteristics, but are also based on the institutional climate in which a firm operates. After controlling for heterogeneity in firm characteristics, leverage was found to be positively influenced by local financial development, while the enforcement system was less relevant. Conversely, debt maturity was longer in regions with high levels of law enforcement, whereas local financial development did not play a relevant role.

Recent developments on Reactivity: Theoretical conceptualization and empirical verification

This paper seeks to enrich the literature of operations and supply chain management through the development of the concept of Reactivity and the introduction of related performance indicators. Reactivity explains the capability to perform operationally and economically under unexpected conditions. A qualitative investigation has aimed to identify useful managerial practices to be adopted to properly perform Reactivity, while an empirical analysis has tested the relevance of each practice as well as the economic benefits that Reactivity provides. The findings suggest that managers and practitioners should develop a Reactivity orientation because it benefits firms’ economic performance when an unexpected event occurs; in addition, several recommended managerial practices should be undertaken to ensure its correct implementation.

Investment cash flow sensitivity and financial constraint: a cluster analysis approach

This article sheds light on the mixed empirical evidence concerning financial constraint and investment sensitivity to cash flow. The literature suggests that measuring financial constraint is far from straightforward, and we therefore propose a cluster analysis procedure to identify unambiguous groups of constrained firms. We found the investment results to be highly sensitive to cash flow for financial constraint firms. Moreover, in line with previous research, our results showed that the traditional criteria used to identify financially constrained firms led to ambiguous interpretations. Overall, our results propose that the cluster analysis can be used to encompass the various single-criterion approaches, thereby providing a finer measurement of the financial constraint construct and deeper insight into the relationship between investment sensitivity to cash flow and financial constraint.

Corporate Governance, Intellectual Capital and Value Creation

This paper is a tentative to integrate, using a heterodox approach, the capabilities perspective, that raises the role of the managers competences, and the incomplete contract perspective, that raises the role of agency problems, to describe how the corporate governance relationships work in high competitive and complex environments. This paper provides a redefinitions and reassessments of corporate governance theoretical models according to the changing nature of the firm. This paper tries to describe the corporate governance relationships by the interaction between authority, as the most valuable source of incentive to offer to the manager for firm-specific investment, and responsibility, as a mechanism to avoid opportunistic behaviors. The interaction between them allows managers to solve hold-up problems at the beginning and, after, moral hazard problems. These two factors balance the incentive problem with the need of a constraint to the managers activities and explain the way to incentive innovation and managerial creativity to reach firms success and support value creation processes.

Beyond multidirectional technology transfer: The case of a ‘proof-of-concept network’

This article focuses on co-development technology transfer models. It offers an empirical analysis of a pioneer model applied in Italy: the proof-of-concept network (PoCN) applied by AREA Science Park in Trieste. Starting with a review of the literature, the authors identify the drivers that facilitate collaboration between the industrial and research systems in the embryonic phase of technology development. Then, discussing the PoCN model, the article analyzes and explores an emerging phenomenon that is as yet poorly understood. The application of a model for co-development, in fact, highlights many advantages for both firms and the research system and improves the efficiency of matching between these distant and heterogeneous sectors. The authors report a single case study which, while appearing to be a limitation of the article, offers elements of originality because it concerns the first applied co-development model in Italy. There are many practical implications, not only for firms and research institutions but also for policymakers who seek to implement public policies to support innovation and technology transfer.

Corruzione e liquidità influenzano le performance delle imprese

italianon questo contributo viene analizzata la relazione fra cash holding e performance, con particolare riferimento all’effetto di moderazione svolto dal livello di corruzione proprio del contesto istituzionale in cui le imprese operano. I risultati del lavoro evidenziano un ruolo rilevante della corruzione, che arriva a modificare segno e intensita della relazione tra cash holding e performance aziendali. EnglishThis paper analyses the relationship between cash holding and performance, especially considering the moderating effect played by the level of corruption of the institutional context in which firms operate. The results show the importance of the institutional context in influencing firms’ financial policies and that corruption can shape the sign and intensity of the impact of cash holding on business performance.

Local Financial Development and Corporate Financial Policy

The aim of the present study is to explain both capital-structure and debt-maturity choices for small and medium-size firms in terms of institutional differences at the local level. In particular, local financial development, the effectiveness of the local enforcement system, together with other firm-specific characteristics, are considered. The empirical analysis is strictly based on the indicator created by (Guiso, Sapienza, & Zingales, 2004) while the methodological approach is similar to (Barclay, Marx, & Smith, 2003). We found that capital-structure and debt-maturity choices interact with each other and that corporate financial decisions are influenced by institutional factors. In contrast to (Barclay et al., 2003) and to reports in the Italian literature, the results of the analysis showed that leverage and debt-maturity are complementary factors. Leverage was found to be positively affected by local financial development while the enforcement system was less relevant. Debt maturity resulted longer in regions with better enforcement of the law, whereas local financial development did not play a relevant role. Other interesting findings regarding the role of credit worthiness, measured through the corporate financial rating, are also discussed.